GIP partners with Fluxys on Euro gas pipeline

Global Infrastructure Partners, the US-based fund manager, is acquiring a 44.9% stake in Fluxys Switzerland from Fluxys G, the Belgian natural gas transmission firm. Fluxys G is 20%-owned by Canadian pension La Caisse.

Global Infrastructure Partners (GIP) has signed a strategic partnership with Belgian natural gas transmission firm Fluxys G, which will see GIP take a 44.9 percent equity interest in Fluxys Switzerland for an undisclosed sum. 

Fluxys Switzerland, through its subsidiary FluxSwiss, has a 46 percent stake in Transitgas, which owns the Transitgas pipeline. As the owner of the transmission system, FluxSwiss has the right to market 90 percent of the transmission capacity in the pipeline system – accounting for around 20 billion cubic metres per year. 

The Transitgas pipeline is 300 kilometres long and crosses central Switzerland, connecting gas markets in Germany and France to Italy. 

“We welcome the opportunity to partner with Fluxys to enhance the security of gas supply and interconnect the key trading hubs in Western Europe,” said Adebayo Ogunlesi, managing partner of GIP, in a press release. 

Citigroup acted as GIP’s financial adviser on the transaction, which is expected to close following clearance from the European Commission regulatory authority. 

In September last year, Caisse de Depots et Placement du Quebec (La Caisse) paid €210 million to increase its stake in Fluxys G from 10 percent to 20 percent. This deal helped Fluxys G acquire 46 percent of Transitgas for €798 million and 49 percent of Trans Europa Naturgas Pipeline for €60 million. The latter transports gas from the German-Dutch border to the German-Swiss border, where it connects with Transitgas. 

GIP, which held a first close of $3 billion on its second infrastructure fund last month, signed a joint venture with El Paso Corporation in 2009 for the construction, ownership and operation of the 675-mile Ruby natural gas pipeline in the US. The deal saw GIP commit up to $700 million of investment.

The US fund manager, which raised $5.64 billion for its debut infrastructure fund, is reported to be one of many potential bidders for Edinburgh Airport, the Scottish airport being sold by BAA.