Jan. 16 (Bloomberg) -- A company controlled by funds run by UBS AG and Caisse des Depots et Consignations sued Norway to reverse tariff cuts on the pipeline network of western Europe’s biggest gas producer.
Njord Gas Infrastructure AS, owned by UBS International Infrastructure Fund and CDC Infrastructure SA, is filing a lawsuit today in Oslo District Court, said Chief Executive Officer Dan-Jarle Floelo. Njord, which owns 8 percent, hasn’t specified a compensation amount in the lawsuit, he said.
The “decision to reduce the Gassled tariffs doesn’t have sufficient legal basis and must therefore be ruled invalid,” Njord said. “The company also claims compensatory damages.”
After a review, the Conservative-led government last month kept the former government’s cuts of as much as 90 percent on tariffs charged by Gassled, which controls Norway’s pipeline network. The owners, which also include Solveig Gas Norway AS, Silex Gas Norway AS and Infragas Norge AS, estimated last year that the cuts will reduce income by 40 billion kroner ($6.5 billion).
“I don’t have a comment on that,” Oil Minister Tord Lien said today to reporters while attending a conference in Oslo. “Legal processes have to be handled within the legal system.”
The changes will see the tariffs for new gas transport agreements reduced from October 2016. Norway has argued the tariff cuts would make more gas discoveries profitable and boost exploration and recovery rates.
The cuts blindsided investors, who had spent 32 billion kroner buying a 44 percent stake in Gassled from oil companies including Statoil ASA and Royal Dutch Shell Plc less than three years earlier. The funds also included Canadian pension funds and units of Abu Dhabi’s wealth fund.
Gassled’s owners argue the cuts damage Norway’s reputation as a stable and predictable place to invest. They’ve also said they won’t put money into the country’s next gas pipeline, planned in the Norwegian Sea.
Silex Chief Executive Officer Kurt Georgsen said the company will decide whether to join Njord at a board meeting to be held in the next “week or two.” Solveig CEO Trygve Pedersen said that the company hasn’t decided whether it will take legal action and “can’t give indication” on when a decision will be made. Infragas CEO Knud Noerve didn’t immediately respond to messages when Bloomberg News called seeking comment.
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