Kuwaitis to sell 43% stake in North Sea infrastructure in multi-million pound deal

The St Fergus gas terminal is among NSMP's operated assets
The St Fergus gas terminal in Buchan

Kuwait’s sovereign wealth fund has announced it will sell a 43.1% stake in North Sea infrastructure in a multi-million pound deal.

Unnamed institutional investors advised by financial services firm JP Morgan will acquire the interest in North Sea Midstream Partners (NSMP), which owns several major gas pipelines and terminals.

The value was not disclosed, but comes months after Wren House Infrastructure Management, an arm of the Kuwait Investment Authority, bought 100% of the business from ArcLight in a £1.3bn deal.

NSMP’s assets include a 67% operated interest in the Sirge pipeline for the west Shetland basin and a 100% operated stake in the Sirge pipeline for the central and Northern North Sea.

The company also has a 100% operated interest in the St Fergus gas terminal and Teesside gas processing plant.

Matt LeBlanc, managing director of JP Morgan Asset Management said:  “We are delighted to partner with long-term investor Wren House and the world class NSMP management team during the next phase of the company’s growth.

“As the owner and operator of critical U.K. infrastructure, NSMP is a terrific addition to the overall global infrastructure investment portfolio which delivers sustainable, risk-adjusted returns to our investors, which comprise over 25 million family pension schemes, of which over 10 million are in the U.K.”

The deal is expected to be completed in early 2019, ahead of Total’s new Glendronach discovery coming online.

Glendronach was found in August and is believed to contain 1trillion cubic feet of gas, described by consultancy Wood Mackenzie as the UK’s largest “conventional” discovery in a decade.

Hakim Drissi Kaitouni, managing director of Wren House, said it shows the importance of NSMP’s assets.

He said: “Wren House is delighted to welcome infrastructure investors as partners in this business.

“Total’s recent major gas discovery of a Glendronach prospect, which is expected to be developed in 2019, showcases the thesis of NSMP’s promising catchment areas in terms of exploration and future developments.”

Wren House’s other UK investments include stakes in Associated British Ports (ABP), London City Airport and Thames Water.

NSMP was established in 2012 to acquire assets in the North Sea midstream sector.

The firm said it has helped bring new developments online including Stella Harrier and the Greater Laggan Area.

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