Mongstad Administrasjon AS ("Mongstad Supply Base") is a leading oil and gas (“O&G”) port in Norway. The Company owns land, buildings, storage facilities, piping, roads, quays and other infrastructure on site, handling 280,000+ tonnes of quay and 2,500 ship arrivals/year.
Mongstad Supply Base is headquartered outside Bergen and has long-term contracts with solid counterparties. Statoil, the main tenant, has recently announced new sailing routes in order to achieve cost and environmental savings, which almost doubled the volumes at the base after being fully implemented by the end of 2015.
The base supports about 20 producing O&G installations in the North Sea and is located close to fields such as Troll, Oseberg and Gullfaks (estimated longevity until 2035-2060).
The supply base logistics operator (CCB) offers services within logistics, repair and maintenance through both in-house competence and sub-suppliers at Mongstad Supply Base. In total, over 50 companies are active at the base.
Market trends and drivers
Offshore O&G activity generates a continuous need for supply of goods, equipment and people in order to maintain a stable production. The supply base is the landside hub for every operation, in many cases coordinating the flow of supply. Examples of onshore need for storage includes spares and equipment, drill pipes, bulk storage and goods related to various subcontractors. The pressure on the oil price has increased both the activity and the importance of Mongstad Supply Base. As transportation cost at sea is a significant operating cost for an offshore installation, O&G operators have increased focus on optimizing sailing routes and supply base operations. This trend is expected to continue. The fields served from Mongstad Supply Base are fields in production, and as such the activity at the base has a limited exposure to more volatile exploration activities. The outlook for key trends affecting Mongstad Supply Base is stable and moderately positive in the medium-term.
The investment rationale in Mongstad Supply Base was founded on high barriers of entry, a strong market position in combination with a stable and growing business with good potential for further expansion as the activity on the base increases.
The business plan includes continued development of the existing base and potential acquisition of infrastructure at other supply bases or other infrastructure assets with similar characteristics, for instance long-term contracts with solid counter-parties.