Slaughter and May advised the Ministry of Defence - £82 million sale of the Government Pipeline and Storage System

Slaughter and May advised the Ministry of Defence (MoD) on its sale of the Government Pipeline and Storage System (GPSS) to Compañía Logística de Hidrocarburos (CLH) for £82 million, which was announced on 20 March 2015. CLH is planning to commence operation of the GPSS on 30 April 2015.

The GPSS network is a fuel storage and distribution network supplying predominantly aviation fuel to UK military bases and the UK civil aviation sector. The network's circa 2,000km pipeline transports approximately 35% of all UK aviation fuel from refineries and ports to the four largest commercial airports, Heathrow, Gatwick, Stansted and Manchester, in addition to military airfields. To protect the provision of GPSS-supplied aviation fuel to the military, an enduring contract has been agreed between the Secretary of State for Defence and CLH. This contract will also bring protection to the UK's national civil resilience interests.

Slaughter and May advised the MoD on a wide range of issues arising from the sale, including transaction structuring; vesting and disposal documentation in particular for issues relating to the new Energy Act regulatory regime, environment, property, tax and transitional services; and crucially the post-disposal contractual relationship between the MoD and CLH.

CLH is the leading company in Spain for the transportation and storage of oil products. It operates and maintains a network of oil pipelines (over 4,000 km) and storage systems serving major airports in Spain, in addition to providing fuel transportation services to military customers across the Country.

Mark Horton said: "This transaction represents the culmination of two years' hard work. It was a complex mandate which, in the end, should create an effective and efficient structure for the supply of aviation fuel to both military and civil customers throughout the United Kingdom."

Michael Corbett Partner
David Ives Partner
Samantha Brady Head of Environment and Climate Change
Tom Inker Head of Construction