WSJ: Norway Angers Investors in Pipeline Network

In 2011, Canada’s largest pension fund plowed about $760 million into a state-controlled Norwegian pipeline network, citing the country’s transparent regulatory environment and expecting the project to deliver stable returns for a long time.

One risk the Canada Pension Plan Investment Board didn’t see coming was that the government of Norway, which prides itself on being one of the world’s safest corners for investors, would slash the rates the pipeline can charge for carrying natural gas.

The fund, along with another Canadian pension plan and some of the world’s largest institutional investors, is now suing the Norwegian government, whose action will cut the amount of revenue they are paid. The investors say they may only get half of the return they had expected, leading to multibillion-dollar losses. The plaintiffs haven’t said what damages they are seeking. MORE