Kuwait sovereign fund’s UK unit to buy NSMP for $1.7bn

Kuwait skyline: Wren House, the London-based infrastructure investment arm of the Kuwait Investment Authority (KIA), fought off rival bids to buy oil and gas pipeline firm North Sea Midstream Partners (NSMP). (AFP)
Updated 23 July 2018
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Kuwait sovereign fund’s UK unit to buy NSMP for $1.7bn

  • London-based infrastructure investment arm of the Kuwait Investment Authority fought off rival bids to buy oil and gas pipeline firm
  • NSMP owns a 67 percent interest in the SIRGE pipeline that transports natural gas from the West of Shetlands basin

The British infrastructure arm of Kuwait’s sovereign wealth fund has agreed to buy oil and gas pipeline firm North Sea Midstream Partners (NSMP) for around £1.3 billion ($1.7 billion) from ArcLight Capital, according to two sources.
Wren House, the London-based infrastructure investment arm of the Kuwait Investment Authority (KIA), fought off bids from JP Morgan, Blackstone, and private equity fund KKR to buy NSMP, according to one of the sources.
“Wren House was bidding against some very big players and they simply offered the best terms,” said the source. A spokesman for Wren House could not be reached for immediate comment.
Its bid was lower than one other but it offered better overall terms, according to one of the sources.
The current management team, including NSMP CEO Andy Heppel, will remain, the source said.
NSMP was valued at around £1.2 billion to £1.3 billion ($1.6 billion to $1.7 billion), the sources said.
Bank of America Merrill Lynch advised ArcLight on the transaction. Patrick de Loe, Merrill’s managing director of EMEA infrastructure, declined to comment.
Freshfields Bruckhaus Deringer was ArcLight’s legal adviser. Wren House was advised by Jefferies and Macquarie Capital. Its legal adviser was Slaughter and May.
The Sovereign Wealth Fund Institute ranks KIA as the world’s fourth-biggest sovereign fund, managing $592 billion. Only Norway, China and United Arab Emirates have bigger sovereign funds.
Wren House is headed by Hakim Drissi Kaitouni, a former investment banker who worked at Bank of America Merrill Lynch in London and New York.
Its other investments in the United Kingdom include stakes in Associated British Ports, London City Airport and Thames Water.
NSMP owns a 67 percent interest in the SIRGE pipeline that transports natural gas from the West of Shetlands basin and a 100 percent interest in the FUKA pipeline which transports gas from the SIRGE pipeline and various fields in the northern and central North Sea.
NSMP also owns the St. Fergus Gas Terminal and Teesside Gas Processing Plant. NSMP counts the Rhum gas field, in the North Sea and which is 50 percent owned by the Iranian Oil Company, among its clients.


Oil rises after US Navy destroys Iranian drone

Updated 19 July 2019
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Oil rises after US Navy destroys Iranian drone

  • The International Energy Agency is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day
  • Speculators have exited options positions that could have provided exposure to higher prices in the next several years

TOKYO: Oil prices rose more than 1 percent on Friday after the US Navy destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, again raising tensions in the Middle East.
Brent crude futures were up 82 cents, or 1.3 percent, at $62.75 by 0100 GMT. They closed down 2.7 percent on Thursday, falling for a fourth day.
West Texas Intermediate crude futures firmed 61 cents, or 1.1 percent, at 55.91. They fell 2.6 percent in the previous session.
The United States said on Thursday that a US Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone.
The move comes after Britain pledged to defend its shipping interests in the region, while US Central Command chief General Kenneth McKenzie said the United States would work “aggressively” to enable free passage after recent attacks on oil tankers in the Gulf.
Still, the longer-term outlook for oil has grown increasingly bearish.
The International Energy Agency (IEA) is reducing its 2019 oil demand forecast due to a slowing global economy amid a US-China trade spat, its executive director said on Thursday.
The IEA is revising its 2019 global oil demand growth forecast to 1.1 million barrels per day (bpd) and may cut it again if the global economy and especially China shows further weakness, Fatih Birol said.
“China is experiencing its slowest economic growth in the last three decades, so are some of the advanced economies ... if the global economy performs even poorer than we assume, then we may even look at our numbers once again in the next months to come,” Birol told Reuters in an interview.
Last year, the IEA predicted that 2019 oil demand would grow by 1.5 million bpd but had already cut the growth forecast to 1.2 million bpd in June this year.
Speculators have exited options positions that could have provided exposure to higher prices in the next several years, market participants said on Thursday.
US offshore oil and gas production has continued to return to service since Hurricane Barry passed through the Gulf of Mexico last week, triggering platform evacuations and output cuts.
Royal Dutch Shell, a top Gulf producer, said Wednesday it had resumed about 80 percent of its average daily production in the region.