Two Canadian pension plans get stake in U.K. pipelines

Gary Park

Two of Canada’s largest pension plans are contributing a combined C$1.2 billion to the purchase of two United Kingdom natural gas pipelines.

Ontario Teachers’ Pension Plan Board and Ontario Municipal Employees Retirement System will each gain a 25 percent stake in the venture, while Scottish & Southern Energy will hold the remaining 50 percent.

The gas distribution deal will see National Grid Transco sell 45,000 miles of pipelines that serve 5 million customers.

To slash debt and expand into the United States, National is selling more than C$10 billion in pipelines, including four of its eight U.K. gas systems.

The teachers’ board, which manages C$79 billion in assets, has been forced to go outside Canada to “find good infrastructure investments” as it tries to build on its C$2.3 billion infrastructure portfolio, said a spokeswoman.

So far it has stakes in Australian toll roads, U.S. generation plants and pipelines carrying oil and gas across the Canada-U.S. border.