May 23, 2018 / 9:40 AM / a month ago

UPDATE 1-Norway court hears appeal from Gassled pipeline owners over tariff cuts

(Adds lawyer, detail)

By Gwladys Fouche

OSLO, May 23 (Reuters) - The Norwegian Supreme Court began hearing an appeal on Wednesday from some of the owners of the Gassled gas network that are challenging government cuts to pipeline tariffs.

A Norwegian appeals court ruled in 2017 against the owners in a lawsuit in which they had argued that the cut in tariffs was unlawful and would cost them 15 billion Norwegian crowns ($1.86 billion) in lost earnings through 2028.

The case against the government is being pursued by four investment companies - Solveig Gas, Silex Gas, Infragas and CapeOmega - which bought Njord Gas Infrastructure, the original owner. Together they hold a combined 48.2 percent of Gassled.

“The state has one sidedly reduced tariffs in the middle of the concession period ... by 90 percent,” Thomas K. Svensen, representing the Gassled owners, told the Supreme Court.

“How much protection does the law give owners?” he asked the five-strong panel.

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 Cape Omega, but they will still be in line for any potential proceeds from a decision in favour of the Gassled partners. They will also help pay legal costs.

Some of the companies involved have said Norway’s unexpected decision to lower gas transportation tariffs would hurt the image of Norway as an investment destination.

The government cut tariffs shortly after the four investors bought their stakes in Gassled in 2011 and 2012 from ExxonMobil , Total, Statoil and Royal Dutch Shell for a total of 32 billion crowns.

Lawyers representing the aggrieved Gassled owners will continue presenting their arguments this week. The Norwegian state will present its arguments next week.

The hearing is expected to last eight days.

$1 = 8.0815 Norwegian crowns Editing by Jason Neely and Edmund Blair

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