OSLO (Reuters) - Norway’s Supreme Court ruled on Thursday in favour of the government in a lawsuit brought by owners of the Gassled gas network over tariffs, ending a legal fight the owners said raised questions about Norway as an investment destination.
Shareholders in Gassled had argued the government acted unlawfully when cutting pipeline tariffs and that it would cost them a combined 15 billion Norwegian crowns ($1.8 billion) in lost earnings through 2028.
“There was no ground to make the change in regulation invalid,” the unanimous five-strong Supreme Court panel said.
The case against the government was pursued by four investment companies - Solveig Gas, Silex Gas, Infragas and CapeOmega, which together hold a combined 48.2 percent of Gassled that transports Norway’s gas to the rest of Europe.
Some of the companies involved have said Norway’s unexpected decision to lower gas transportation tariffs would hurt its image as an investment destination. The Nordic country is Europe’s second-largest gas supplier after Russia.
While tariffs were cut by 90 percent for some future gas resources that are added to the network, Gassled’s owners will still receive accumulated payment of 122 billion crowns by 2028, a reduction of 14.7 billion, Norway’s energy ministry said.
“The owners have received a reasonable return on their investments,” the ministry said in a statement, adding that lower pipeline fees could boost the extraction of offshore gas.
The four investment companies were originally owned by Allianz, UBS, the Abu Dhabi Investment Authority, Canada’s Public Sector Pension Investment Board, the Canada Pension Plan Investment Board and France’s Caisse des Depots.
In October 2017, UBS and Caisse des Depots said they were selling their stakes to CapeOmega, but would still help pay legal costs.
The government cut tariffs shortly after the four investors bought their stakes in Gassled in 2011 and 2012 from ExxonMobil, Total, Statoil - now know as Equinor - and Royal Dutch Shell for 32 billion crowns.
At least two of the partners said they would continue to be “prudent owners”.
“We now need to understand this judgement. Today is definitely not the day to decide (on our stance to other investments),” Silex Gas CEO Kurt Georgsen told Reuters.
“We will focus on our role in Gassled. We will make sure that Gassled stays,” Solveig Gas CEI Trygve Pedersen said.
“That doesn’t say if we will look at other projects in the future or not. I do not want to comment on hypothetical scenarios. So far we have only made investments in Gassled,” he added.
The partners will have to pay the state’s legal costs, estimated at over 5.3 million crowns ($646,000), ruled the court.
Writing by Terje Solsvik; Editing by Mark Potter and Edmund Blair