Global Infrastructure Partners (GIP) has agreed to purchase a 25% equity stake in Scotia Gas Networks (SGN) from OMERS Infrastructure for an undisclosed sum.

GIP will acquire the stake in (SGN) through its separately managed account (SMA) platform.

SGN, which is said to be a crucial UK infrastructure asset, manages two gas distribution networks in Scotland and the Southeast of England.

With a regulated asset value of around £6bn, the company serves major cities such as London, Edinburgh, Oxford, and Glasgow.

Claimed to be the second largest gas distribution network operator, SGN serves six million customers across its service territory.

With around 3,900 employees, SGN generates an annual turn-over of more than £1.2bn.

GIP chairman and managing partner Adebayo Ogunlesi said: “GIP has deep experience and a strong track record of investing in and driving value from core utilities and natural gas infrastructure. We regard SGN as the premier gas DNO in the UK and a key player in the energy transition.

“The conversion of gas distribution networks into hydrogen ready infrastructure represents a unique opportunity to significantly grow the Company while supporting the UK’s net zero goals through the adoption of green hydrogen.

“We look forward to working with management and the Company’s other shareholders to help deliver on these growth ambitions and support its net zero strategy.”

Subject to regulatory review and approvals, the deal is expected to be completed in the first quarter of next year.