CPPIB consortium in $3.2bn Norwegian gas deal

Together with Allianz Capital Partners and Abu Dhabi Investment Authority, the Canadian pension plan has agreed to acquire a 24.1% stake in Gassled, a gas transportation business.

Norwegian oil company Statoil has agreed to sell a 24.1 percent stake in Gassled, which owns most of the gas transport infrastructure on the Norwegian Continental Shelf, to holding company Solveig Gas Norway for C$3.2 billion (€2.2 billion; $3.2 billion). Statoil is retaining a 5 percent stake in Gassled following the deal.

Solveig Gas Norway is owned by the Canada Pension Plan Investment Board (45 percent), German alternative investment firm Allianz Capital Partners (30 percent) and Infinity Investments (25 percent). Infinity Investments is a subsidiary of sovereign wealth fund the Abu Dhabi Investment Authority.

In a statement, CPPIB said it would be committing an equity investment of C$738 million to the transaction.

In a statement, CPPIB senior vice president Andre Bourbonnais said: “As a long-term investor, we look for infrastructure assets that will deliver stable returns over a long time horizon and Gassled fits this criteria. Norway is known for having a strong economy and a transparent regulatory environment, which is attractive to investors such as CPPIB.”

Established in 2003, Gassled is one of the world’s largest offshore natural gas transportation networks. It is expected to benefit from the growth in European gas demand and Norway’s position as a key supplier of gas to Europe.

Eldar Saetre, executive vice president for marketing, processing and renewables at Statoil, said in a statement that the divestment was “part of our continuous efforts to increase capital efficiency and maximise shareholder value creation” and would allow a “re-deployment of capital into assets and projects that yield higher rates of return”.

Completion of the transaction is subject to certain regulatory approvals, including from the Norwegian Ministry of Petroleum and Energy.

The deal is the latest sign of CPPIB’s growing commitment to infrastructure. In the recently published Infrastructure Investor 30 ranking of the largest investors in the asset class, the pension climbed from number 11 the previous year to number 3 this time – behind only Macquarie Group and Goldman Sachs.