Norway, western Europe’s largest gas exporter, may face legal action from owners of the Gassled pipeline network after the government decided against reversing a decision by the previous administration to cut tariffs.
“We will try this case because we believe the government’s decision lacks a legal foundation,” Trygve Pedersen, chief executive officer of Gassled investor Solveig Gas Norway AS, said by mobile phone today. “That now seems to be the only alternative.”
Norway’s Conservative and Progress parties, which formed a new government in October, said during the election campaign they would review the Labor-led coalition’s cuts to gas pipeline tariffs as investors threatened a legal fight over almost $7 billion in lost income. The government won’t overturn its predecessor’s decision, Oil and Petroleum Minister Tord Lien said in a statement today.
“Good resource management means that profits should be generated at the fields and not the infrastructure,” Lien said in the statement. “Lower tariffs will stimulate exploration, development and production of oil and gas, strengthen competitiveness of Norwegian gas and ensure that the best transport solutions for gas are chosen.”
Norway’s previous government, led by Jens Stoltenberg, pushed through cuts as deep as 90 percent to the tariffs that operators of the nation’s gas pipelines can charge to ship the fuel. The changes, announced in June, will see the tariffs for new gas transport agreements reduced from October 2016.
Gassled’s owners, which include Canadian pension funds, a UBS AG infrastructure fund and a unit of Abu Dhabi’s sovereign wealth fund, have said they will take legal action to prevent the loss of income. The investors spent 32 billion kroner ($5.2 billion) buying about 45 percent of the gas pipeline network from companies including state-controlled Statoil ASA. (STL)
Solveig Gas owns 24.8 percent of Gassled, Njord Gas Infrastructure AS holds 8 percent, Silex Gas Norway AS 6.1 percent and Infragas Norge AS 5 percent.
“We still have a very good legal basis to possibly try this case,” said Dan Jarle Floelo, CEO at Njord Gas Infrastructure AS.
Legal action needs to be approved by the boards of both Njord and Solveig, Floelo and Pedersen said.
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