UBS, CDC offload tariff-hit Norway gas venture

The pair will retain the ongoing legal costs of their case against the Norwegian government after selling to private equity-backed CapeOmega.

UBS and France’s Caisse des Dépôts et Consignations have sold their interests in Norway’s gas pipeline system, more than four years after the asset was hit by tariff cuts.

The pair have sold 100 percent of Njord Gas Infrastructure to local oil and gas company CapeOmega, which is backed by sector-focused private equity firm HitecVision. Njord Gas owns an 8 percent stake in Norway’s central gas pipeline system Gassled.

A transaction price was not disclosed for the asset, which UBS and CDC paid about $1.1 billion for in 2010. UBS’s investment came through its $1.5 billion debut International Infrastructure Fund.

However, the investment turned awry in 2013 when the Norwegian government reduced tariffs by as much as 90 percent, prompting legal action from the consortium alongside other shareholders such as PSP, CPPIB, Allianz and the Abu Dhabi Investment Authority. The quartet remain owners of their respective stakes.

Earlier this year, Norway’s appeal court upheld the 2015 verdict of a lower court that ruled in favour of the state. Last month, Njord Gas signalled its intention to take the case to the Norwegian Supreme Court. CapeOmega said UBS and CDC retains all upside and cost in relation to the ongoing dispute.

CapeOmega will become Gassled’s third-largest shareholder, building on the 2 percent it previously owned before the acquisition.