Partners Group buys CapeOmega from HitecVision for €1.2bn

CapeOmega is an unusual asset for infrastructure funds to target because, as well as three stakes in energy infrastructure assets, including Gassled, it also has three stakes in energy production assets in the Norwegian and North Seas, according to people following the process who spoke with Unquote sister publication Inframation. However, the sources said infrastructure assets make up the bulk of the portfolio in terms of value, which makes it of interest to infrastructure funds.

HitecVision acquired the company in 2014, drawing equity from HitecVision VII, a $1.9bn fund set up to target the oil and gas industry in northern Europe and the Gulf.

Zug-headquartered Partners Group's current investments in energy infrastructure assets through its infrastructure fund include Texas-based gas-processing facility Raven, Turkish gas distribution business Enerya, and Oklahoma-based Superior Pipeline Company. It also joined forces with Singapore sovereign wealth fund GIC to bid for energy company Arclight's North Sea Midstream Partners last year, but lost out to Wren House, part of the Kuwait sovereign wealth fund.

Partners Group said it will work closely with CapeOmega's management team, led by CEO Gisle Eriksen, to further expand in offshore infrastructure and related assets, with a focus on greenfield developments and brownfield acquisitions.

The most valuable asset is its 16% stake in the Norwegian gas transport system Gassled, which could be worth NOK 6.5bn (€670m) based on the NOK 1.09bn CapeOmega paid for a 1.9% stake in the asset in 2016 as it built up its holding.

Gassled's valuation was hit hard by a 2013 government decision to slash the tariffs it can charge that have not already been contracted by 90%. However, CapeOmega, which was established in 2014, began investing in Gassled after the government decision, meaning the tariff cut was priced into the amount it paid.

The other infrastructure assets in the Gassled portfolio are a 19.1% stake in Polarled, a pipeline connecting the Aasta Hansteen gas field to the Nyhamna processing plant, and a 6.6% stake in the Nyhamna plant.

The production assets are a 49% stake in the Brynhild production licence, a 4.36% stake in the Enoch field and a 45% stake in the Oselvar oil and gas field. CapeOmega paid $95m (€84m) for 39% of Brynhild in 2017, having previously owned 10%.

Other infrastructure investors that had been in talks with HitecVision about buying CapeOmega included Macquarie Infrastructure and Real Assets (Mira) and BlackRock last year. However, the talks failed to result in a deal and the sale was relaunched earlier this year. Mira and BlackRock declined to comment.

Other shareholders in Gassled include Allianz, which has a 6.4% stake, and until recently Abu Dhabi Investment Authority and Canada Pension Plan Investment Board (CPPIB). HitecVision earlier this month announced that it has agreed to acquire Solveig Gas, whose sole asset is a 25.55% stake in Gassled, from Solveig Gas's current shareholders Allianz (30%), Abu Dhabi Investment Authority (30%) and CPPIB (40%), for an undisclosed fee.

The purchase brings HitecVision's stake in Gassled to around 40% when added to the CapeOmega stake in Gassled.

People following the process told Inframation that HitecVision was likely to have to reduce its stake in Gassled either through a sale of CapeOmega or other means. This is because Norway's Ministry of Petroleum and Energy indicated to Gassled's shareholders in a letter in September that no shareholder other than the Norwegian state can expect to be allowed to own more than a third of the asset. The Norwegian state owns 47% of Gassled.

Aside from Solveig and CapeOmega, Gassled shareholders include state-owned Petoro (46.7%) and oil company Equinor (5%). Allianz also owns 6.4% through its wholly owned subsidiary Silex Gas.

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• Topics
• Infrastructure
• Nordics
• Infrastructure
• HitecVision
• Partners Group
• Norway