SL Capital diversifies with Dutch pipeline stake

The firm’s first infrastructure investment outside the UK and the Nordics is part of a “wider strategy” in the European gas sector.

UK-based fund manager SL Capital has bought an 18 percent stake in the Noordgastransport Extension gas pipeline system.

The share was bought from Nederlandse Aardolie Maatschappij, a joint venture between oil majors Shell and Exxon Mobil, and includes a 178km pipeline built in 1975 and a 140km extension constructed in 1999.

The extension pipeline is a separate asset from Noordgastransport, which manages a 470km pipeline network and is the longest system in the Dutch North Sea. NGT, in which InfraVia and PensionDanmark are shareholders, remains a part-owner of the extension project alongside local oil and gas firm EBN.

The undisclosed deal was pursued through SL Capital’s first infrastructure fund, which closed on £516 million ($692.4 million; €587.9 million) earlier this year. While the fund has secured a gas distribution investment through its acquisition of the Gasum network in Finland, the deal is the fund’s first outside the UK or the Nordics. Other investments in the fund include hydropower plants in Norway and a £1 billion rolling stock deal in the UK alongside Rock Infrastructure and GLIL.

“This is SL Capital’s first Dutch infrastructure investment and our first foray into the midstream sector,” said Dominic Helmsley, head of SL Capital Infrastructure. “We believe the pipeline system will capture significant volumes of natural gas, and the investment is part of a wider strategy to develop a strong presence in the European gas and midstream sector.”

SL Capital is believed to be preparing the launch of a second infrastructure fund before the year end. The successor vehicle is expected to be of a similar size and strategy to the firm’s first attempt.