Gassled partner files lawsuit over gas tariff cut

A partner in the Gassled natural gas pipeline network has filed a lawsuit against the Norwegian government aiming to overturn a cut in gas transport tariffs, which several partners have said would cost them US$ 6.6 billion in lost earnings over 20 years.

Investors who have financed billions into Norway's gas network are angry about a decision taken by the former government, and backed by the current one, to lower the tariffs the network can charge energy companies to use it.

Njord Gas files lawsuit

"Njord Gas ... has filed a writ of summons to initiate legal proceedings against the (Norwegian Ministry of Oil and Energy)," the company said in a statement last week.

Njord Gas, which is owned by Swiss bank UBS and France's Caisse des Depots, argues that the government’s “decision to reduce the Gassled tariffs does not have sufficient legal basis and must therefore be ruled invalid,” it said in a statement today. “The company also claims compensatory damages for the loss the company incurs as a result of the decision.”

It said it would also seek damages for the losses incurred but did not disclose how much money it would be asking for.

A group of international investors have put US$ 5.1 billion into Gassled in recent years. They include the Abu Dhabi sovereign wealth fund, German insurer Allianz, the Canada Pension Plan Investment Board and Canada's Public Sector Pension Investment Board.

Previous government cut tariffs; new administration reaffirms decision

In January 2012, Norway's previous centre-left government cut tariffs which the Gassled network charges energy firms to transport gas from North Sea platforms to processing plants in Norway and terminals in Britain, Germany, France and Belgium.

It argued the move would encourage exploration by oil companies.

The new centre-right government reaffirmed that decision in December, which disappointed the Gassled partners who had opposed the tariff cut. Just days earlier they had met with the Oil and Energy Minister to try to convince him to reverse the decision.

Oil and Energy Minister Tord Lien declined to comment about Njord Gas' decision on Thursday, citing the legal challenge.

Gassled owners unite in legal action

Three other Gassled partners - Silex Gas, Infragas and Solveig Gas - said in December they would file a lawsuit against the Norwegian government.

Dan-Jarle Floelo, Chief Executive Officer of Njord, said the company hasn’t specified a compensation amount in the lawsuit. The Gassled owners have estimated that the cuts will reduce income by 34 billion kroner (US$ 5.5 billion).

Norway’s previous government, led by Jens Stoltenberg, pushed through cuts as deep as 90% to the tariffs that operators of the gas pipelines can charge to ship the fuel. That’s been backed by Norway’s new administration, led by Erna Solberg. The changes, announced in June, will see the tariffs for new gas transport agreements reduced from October 2016.

Edited from various sources by Elizabeth Corner

Read the article online at: https://www.worldpipelines.com/business-news/20012014/gassled_partner_files_lawsuit_over_gas_tariff_cut/