Two infrastructure funds managed by Colonial First State Global Asset Management (CFSGAM), the Global Diversified Infrastructure Fund (GDIF) and the Colonial First State Active Infrastructure Income Fund (AIIF), have agreed to acquire the Maui natural gas pipeline (MGP) from Shell New Zealand-controlled Maui Development.
The pipeline holding company, which counts OMV New Zealand and Todd Energy as minority partners, has been looking for a buyer for some time, and the sale is separate from Royal Dutch Shell's review of its local businesses, it said. The pipeline transports gas from the Maui field, and accounts for about 78 per cent of New Zealand's natural gas production.
Gavin Kerr, Director, Infrastructure Investments, said:
“We are very pleased to have reached an agreement with the Maui Mining Companies to acquire the MGP for NZ$335m. This acquisition is an excellent fit with our proposed acquisition of Vector Gas Limited (VGL) and we anticipate benefits to come from operating the two gas transmission systems in New Zealand under common ownership. Subject to regulatory approvals, we anticipate completing both acquisitions in the first half of 2016."
Chris McArthur, Partner, Infrastructure Investments, commented:
“VGL has been the technical and system operator of the MGP for many years and this acquisition is a natural next step for the businesses. Together MGP and VGL will complement the six existing investments comprising Brisbane Airport, Adelaide Airport and ANZ Terminals in Australasia, and our European utility businesses Anglian Water, Electricity North West and Caruna.”
In regards to future plans, Danny Latham, Partner, Infrastructure Investments added:
“We are seeing strong global institutional interest in gas utility networks of this quality and it is pleasing to have a further acquisition in this sector so soon after agreeing to acquire VGL. We expect MGP will be both yield and value accretive to VGL. This investment is another positive step for the GDIF portfolio and a further GDIF close is planned in early 2016.”
Financial close of the MGP and VGL acquisitions are expected during the first half of 2016, and are conditional on approval under the New Zealand Overseas Investment Act.