SL Capital increases Dutch pipeline exposure with 20% acquisition

The fund manager adds InfraVia’s stake in NGT after purchasing an 18 percent interest in the pipeline company’s extension assets last year.

SL Capital Partners has expanded its ownership in a North Sea natural gas pipeline system with the acquisition of InfraVia Capital Partners’ 20 percent stake in Noordgastransport (NGT).

SL Capital, the private market arm of Aberdeen Standard Investments, purchased InfraVia’s stake through its SL Capital Infrastructure I fund, which closed in February 2017 on £516 million ($699.8 million; €586.7 million). This is the UK-based fund manager’s second investment in NGT following the purchase of an 18 percent stake in an extension network of the pipeline company’s assets.

“This second stake in the NGT pipeline system follows our strategy to develop a strong presence in the European gas and midstream sector,” Dominic Helmsley, head of economic infrastructure at Aberdeen, said in a statement. “The investment provides us with exposure to a greater number of gas fields, therefore diversifying cash flows for investors in our infrastructure fund.”

NGT is the longest gas pipeline network operating in the Dutch North Sea, a system spanning 470km that connects 75 operator platforms to a processing facility.

InfraVia first acquired its stake in NGT in 2014 through a deal with French utility Engie. Now, the pipeline company’s shareholders include SL Capital and PensionDanmark. SL Capital acquired its stake in the NGT extension assets from a joint venture between oil companies Shell and Exxon Mobil.

The firm’s first infrastructure fund has also invested in Gasum, a gas distribution business in Finland, as well as hydroelectric plants in Norway and a £1 billion rolling stock deal in the UK alongside Rock Infrastructure and GLIL. The fund is focused on investing in core infrastructure assets in Europe and should be fully deployed by the end of this year, a source familiar with the matter told Infrastructure Investor.

SL Capital is currently raising its second infrastructure fund, which is expected to be of similar size and strategy to Fund I but was launched through a SICAV-type structure and will be euro-dominated, the source said. According to a filing with the UK’s Companies House, the firm registered SL Capital Infrastructure II in December, but neither disclosed the fund’s target size nor its currency denomination.

The firm declined to comment for this story.