The State did not make an error in reducing the prices of the Gassled pipeline network, finds the Court of Appeal. Giant foreign funds claim to lose billions.

The state once again won in the Gassled case.

This is what a ruling from the Borgarting Court of Appeal reveals. The appeal of investors in the Gassled system was rejected, so the district court’s judgment will stand.

Investors in the Gassled pipeline system believed the state made a mistake by reducing gas transportation rates, but they lost their case in district court.

The Borgarting Court of Appeal has now also concluded that the state’s decision to change the rates was valid and dismissed the appeal.

“The Court of Appeal reached the conclusion that the ministry did not violate the requirements that could reasonably be imposed on the activities of the ministry or on the management of records in connection with the approval of the transactions,” wrote the court of appeal in the judgment.

Behind the plaintiffs are large international investors such as the Canadian pension fund Canada Pension Plan Investment Board, the insurance company Allianz and the sovereign wealth fund of Abu Dhabi.

Between 2010 and 2012, these and other investors purchased shares in the Gassled pipeline system from Statoil, among others, for approximately NOK 32 billion, through the companies Infragas Norway, Silex Gas Norway, Solveig Gas Norway and Njord Gas Infrastructure.

Njord writes in a message that the company must decide on a possible appeal by September 16 and that it will make an announcement later.

Learn more: State wins gas dispute in district court

Concern about framework conditions

The case attracted a lot of attention abroad and was widely reported. The reason is that investments in Norwegian infrastructure could become less attractive if global investors believe that the state can suddenly change the framework conditions.

Learn more: German giant on Gassled cuts: Incomprehensible discrimination

– This case will reduce investors’ willingness to work with the Norwegian government in the future, said Giles Frost of infrastructure investor Amber Infrastructure Group. to the Wall Street Journal in 2015before the case went to district court.

The reduction in rates means investors are making less money from gas transportation than they expected from buying Gassled stock.

Businesses estimate that they are losing around NOK 15 billion due to the state changing customs tariffs.

Gassled is a gas pipeline system for gas transportation and export, which connects gas fields in the North Sea and the Norwegian Sea to onshore processing facilities in Norway and reception facilities in Great Britain. Brittany, France, Germany and the Netherlands.

Learn more: The state is being sued for billions

The Ministry of Oil is satisfied

– The Ministry of Oil and Energy is satisfied that the state was acquitted in the judgment of the Borgarting Court of Appeal, said Ella Bye Mørland, communications advisor at the Ministry of Oil and Energy.

– This means that the state has been acquitted by two courts in the trial relating to the change in tariff regulations which includes the Norwegian gas transport system (Gassled), she says.

When the state changed the tariffs in 2013, this included ensuring that as much of the value creation as possible was taken out of the fields and not out of transport.

Lower costs for transporting gas through pipelines translate into lower costs for companies facing exploration, development and exploitation decisions. Thus, it becomes more profitable to search for more resources, » said the Ministry of Oil and Energy after the district court verdict in 2015.

Must pay court costs

The district court ordered the parties to pay their own legal costs, but the Court of Appeal reversed that decision.

As a result, investors who filed a lawsuit against the state must pay a total of more than NOK 42 million in legal costs for the cases before the district court and the court of appeal.

This amount must be paid by the companies Njord Gas Infrastructure AS, Solveig Gas Norway AS, Silex Gas Norway AS and Infragas Norway AS.

The state had demanded cover of NOK 19.7 million in legal costs for the court of appeal, but the court found that this was too much and reduced the sum somewhat.

“Full coverage of fees required for work carried out during the appeal hearing is not granted, as the Court of Appeal does not consider it necessary for seven lawyers to be present during the entire hearing,” indicates the judgment.

Learn more: Norwegian oil majors fight against Norway: the state is sued for 15 billion