Canadian asset manager OMERS Infrastructure has agreed to sell a 25% interest in British gas distribution company Scotia Gas Networks (SGN) to Global Infrastructure Partners (GIP).

Said to be the UK’s largest gas distribution network, SGN operates Scotland Gas Networks and Southern Gas Networks, which are two of eight regulated gas distribution networks in England, Wales and Scotland.

Employing around 3,900 people, the firm serves key cities such as London, Edinburgh, Oxford, and Glasgow.

Financial terms of the deal were undisclosed.

OMERS Infrastructure senior managing director and Europe head Alastair Hall said: “We first invested in SGN at its creation in 2005, and it is now the UK’s leading gas distribution company across key operational and customer metrics.

“Over this period, we have supported significant regulated capital investment programmes, the development of several commercial businesses, and SGN’s preparations for the transition to hydrogen including the H100 project in Fife.

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“We will redeploy the capital back into growing our C$30 billion direct global infrastructure portfolio.”

Subject to regulatory review and approvals, the transaction is slated for completion in the first quarter of 2022.

GIP chairman and managing partner Adebayo Ogunlesi said: “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.”

Earlier this year, Britain’s SSE agreed to sell its 33.3% stake in SGN to a Canadian consortium for $1.70bn (£1.225bn).

The consortium comprises Ontario Teachers’ Pension Plan Board (Ontario Teachers’), which is an existing SGN shareholder, and Brookfield Super-Core Infrastructure Partners.

The sale forms part of SSE’s plan to focus on its core low-carbon electricity businesses and renewables, as well as transition to net-zero business by 2045.