Norway plans to nationalize gas pipelines when concessions expire

(Reuters) - Norway plans to nationalize most of its gas pipeline network when many existing concessions expire in 2028, the oil and energy ministry said on Friday, to tighten control over key infrastructure.

Norway has become Europe's largest supplier of gas, following a drop in Russian gas flows, which it supplies via a network of pipelines stretching some 5,590 miles.

The ministry said on Friday it was sending a letter to licensees "signaling the state aims to make use of the right of repatriation at the end of the license period".

"The state wants complete state ownership of the central parts of the Norwegian gas transport system," it said, without giving reasons.

Norway takes an active role in its industry and is the top owner of the country's biggest bank, DNB (DNB.OL), telecoms operator Telenor, and oil company Equinor, among others.

The gas pipeline network is owned by Gassled, a partnership set up in 2003 by the oil companies that were producing gas offshore Norway at the time. It cost billions of dollars to build.

One of the Gassled co-owners told Reuters it was "surprised" at the move.

"Norwegian petroleum policy has had its foundation on combined ownership from private companies and the state and has worked well," said Kurt Georgsen, CEO of Silex Gas, wholly owned by German insurer Allianz.

"We will work with the government to find a good solution for the transfer of ownership," he added.

Swiss-based Partners Group, which acquired one of Gassled's co-owners, Cape Omega, for $1.3 B in 2019, told Reuters it would work "constructively" with the government to find a solution. It declined to elaborate.

The Norwegian state already has 46.7% of Gassled via state-owned company Petoro, while another 5% is held by majority state-owned Equinor.

In some cases, the government may have to compensate other shareholders, the ministry said, without elaborating.


One opposition party questioned the rationale for the government's move.

"I don't see any reasons to nationalize these pipelines," Terje Halleland, energy spokesman for the rightwing Progress Party, told Reuters. "The state already has control of Gassled and the (gas transportation) sector is heavily regulated."

"I think it's going to be negative for the future investments in the Norwegian continental shelf," he added.

Gassled owns the Kaarstoe and Kollsnes processing plants as well as the majority of the pipelines delivering Norwegian gas to the European Union and Britain.

It was not immediately clear which exact parts of the network would become owned by the state. The energy ministry was not immediately available for additional comment.

Over time, the oil companies have reduced, or sold entirely their stakes, often selling to investment companies.

Aside from Partners Group and Allianz, another owner in Gassled is private equity firm HitecVision. It did not immediately reply to a request for comment.

The technical operator of the infrastructure is Gassco and would remain so under the new regime, the energy ministry said.

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