Norway’s government has won the latest battle in a long-running row over tariffs for transporting gas through offshore pipelines.
The country’s Borgarting Court of Appeals ruled in favour of the government last week in a lawsuit that was brought by investors in pipeline joint venture Gassled.
Solveig Gas, Silex Gas, Njord Gas Infrastructure and Infragas had argued that Norway’s decision shortly after they bought their stakes in Gassled in 2011 and 2012 to cut pipeline tariffs was unlawful and would cost them 15 billion kroner (US$1.8 billion) in lost revenue by 2028. The reduced tariffs took effect on October 1, 2016.
Last week’s unanimous decision upheld the 2015 verdict of a lower court, which said the government was acting within its rights when it cut tariffs.
However, while the state did not in that initial verdict win the right to have its costs covered by the plaintiffs, they were ordered last week to pay the government 42.2 million kroner (US$5 million).
“The state has won the case and has the right to have its costs covered” by the plaintiffs, the appeals court said.
Solveig Gas said it would consider “carefully” whether to appeal. “We will obviously continue as owners in Gassled,” its CEO Tryve Pedersen said. “We will keep Gassled running. This case never impacted in our role in Gassled.”
Silex Gas had told Reuters ahead of the latest verdict that it would consider appealing to the Supreme Court if it lost this round, but would also be open to negotiating a settlement with the Norwegian government.
“The court has emphasised the ministry did not establish transparent systems,” Silex CEO Kurt Georgsen said following last week’s verdict. “But the court has also said that there was a legal basis for the tariff reduction and that we have no basis for claims and damages.”
He declined to comment on whether Silex would now seek to sell its Gassled stake.
The four investors hold a combined 44% stake in Gassled, which is 45.8% owned by Norway’s government via state-owned Petoro. State-run Statoil also owns 5%. They paid 32 billion kroner (US$3.8 billion) for the holdings, which they acquired from ExxonMobil, Total, Statoil and Royal Dutch Shell.
The plaintiffs have until September 16 to appeal to the Supreme Court.