Oslo Tingrett (the Oslo City Court) has found in favour of the Norwegian state in a legal action brought against it by a group of investors in Gassled, the Norwegian gas transportation network.
Njord Gas Infrastructure (a consortium comprising UBS Infrastructure Fund and CDC Infrastructure) announced in January 2014 that it had filed a writ of summons to initiate legal proceedings against Norway’s Ministry of Petroleum and Energy (MPE).
The writ followed the decision of the MPE in June 2013 to amend tariff regulations so that future tariffs in Gassled were reduced by as much as 90 percent. The decision was a major blow for investors including Njord Gas, which owned more than 30 percent of the network, which is valued at around $12.5 billion.
In submitting its legal challenge, Njord Gas – which made its investment in 2010 – said the MPE decision to reduce tariffs “does not have sufficient legal basis and must therefore be ruled invalid”.
The tariff cut – which starts to take effect next year – triggered a wave of downgrades for the debt taken out by private sector investors in the network. Investors also include the Solveig Gas Norway consortium, which comprises Allianz Capital Partners, Canada Pension Plan Investment Board and the Abu Dhabi Investment Authority.
Gassled processes and transports 96 percent of the gas extracted from the Norwegian continental shelf, allowing it to be exported to the European Union (EU). Gassled supplies about 20 percent of the gas in Europe.
The plaintiffs have been given six weeks by the Oslo City Court to decide whether or not to appeal the decision. Njord Gas said it would make an announcement when its decision had been made.
The Gassled tariff reduction came at a time when a number of other European governments were also slashing tariffs, most notably in the Spanish solar industry. However, wealthy Norway was previously seen as a safe haven in which investments had almost bond-like status – so the decision there came as a particular shock.