An Oslo court started to hear a $1.9 billion lawsuit by a group of international investors against Norway on Monday, in a case that challenges the country's reputation as a predictable place to do business with little political risk.
Investors including Allianz, UBS, the Abu Dhabi Investment Authority and two Canadian pension funds are suing Norway over its decision to cut tariffs for using the Gassled pipeline network, arguing it was liable for the 15 billion crowns ($1.9 billion) in lost earnings they would suffer as a result through 2028.
The firms, many of which bought into Gassled in 2011 through a 17 billion crown deal for state-controlled Statoil's 24 percent stake, argue the tariff cut benefits gas producers, the very firms that sold them their stakes.
"Statoil has an interest in this," Jan Jansen, one of the lawyers representing the plaintiffs, who own 45 percent of Gassled, told the court in the trial that will run until mid-June. "First they sell their share and then they benefit from the change in tariffs."
"The companies who bought the stakes are ... investing in infrastructure because the return is safe and long-term, it is what you call 'long money'," Jansen said.
Shareholders, in the 8,000-kilometre (5,000-mile) gas network, which include Canada's Public Sector Pension Investment Board, say the tariff was a fundamental condition of their investment.
The state, which presents its case next month, rejected the claims, arguing that returns were above agreed levels and fees were so high that they discouraged new offshore investment.
The government said profit from oil and gas should be derived from the fields, not from the infrastructure, and that pipeline tariffs needed to be cut from October 2016 because the predicted return had been achieved.
The government, which is the biggest shareholder in Gassled with 45.8 percent, said the actual return was 10 percent in 2012 and was seen rising to 10.5 percent in 2028, well above its long standing policy of granting investors a 7 percent real rate of return.
The tariff reduction was first announced by Norway's previous, centre-left government that lost power in late 2013, but the new centre-right administration reaffirmed its support for the cut in one of its first decisions after taking office.
Gassled transports gas from platforms in the North and Norwegian Seas to processing plants in Norway and terminals in Britain, Germany, France and Belgium, supplying about a fifth of the European Union's gas needs.
Statoil itself is not involved in the case.