November 13, 2024 [Reuters]- Norway has reached a deal with seven private owners for a government takeover of much of the country’s extensive gas pipeline network, cementing its control over a key infrastructure, the Norwegian energy ministry said on Tuesday.
Norway in 2023 announced plans to nationalise most of its vast gas pipeline network, a major processing plant and other facilities when many existing concessions expire in 2028, and had invited current owners to negotiate a transition.
The government agreed to pay the seven owners 18.1 billion crowns ($1.64 billion) for their assets, including stakes in some 9,000 km (5,600 miles) of pipelines, comprising major subsea supply routes to Germany, Britain, France and Belgium.
The transaction supports the government’s aim of keeping pipeline tariffs low for gas exporting companies, and thus facilitating profitable long-term production, the ministry said.
Norway is Europe’s largest gas supplier following a sharp fall in Russian deliveries triggered by Moscow’s full-scale invasion of Ukraine in 2022, but the government said this had not influenced its decision on state ownership.
“This is not a question of national security concerns,” an energy ministry spokesperson said.
The Nordic country’s centre-left government regards the pipeline network stretching some 9,000 km (5,600 miles) along the seabed as an asset of national interest over which it wants state ownership.
While seven companies came to an agreement with the government, two groups rejected the offer.
Much of Norway’s gas transportation pipeline network is owned by Gassled, a partnership set up in 2003 by oil companies that were producing gas offshore Norway at the time.
The agreement lifts the Norwegian state’s stake in Gassled to 100% from 46.7% previously.
“I am particularly pleased to have found solutions that clarify that there will be full state ownership of the large and important Gassled system,” Energy Minister Terje Aasland said.
The government agreed terms with Shell, CapeOmega, ConocoPhilipps, Equinor , Hav Energy, Orlen and Silex to take over their shares in the joint ventures, it said. The agreement is backdated to Jan. 1, 2024.
Equinor will retain stakes of 5% in both the Nyhamna processing plant and the Polarled pipeline.
Oil major Shell agreed to sell its remaining 2% stake in the Nyhamna plant, marking a further retreat by the group from the Norwegian continental shelf.
The sale did not affect Shell’s position as operator of the Ormen Lange gas field, nor its role of technical service provider to Nyhamna, the company said in a statement.
North Sea Infrastructure (NSI) and M Vest Energy, who hold ownership shares in Nyhamna and Polarled respectively, did not agree to a sale and maintain their stakes in the assets.
However, the government still aims to take over these stakes either when the current concession period ends or if a deal is agreed before then, it said.
NSI said it did not consider the government’s offer for its stake in Nyhamna to be good enough.
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