OMERS, which has $121 billion in net assets, hired Citigroup earlier this year to sell the stake it bought 2016 for around 700 million euros ($734.23 million), the sources said.

A spokesperson for OMERS said the Canadian firm aborted the sale after conducting a strategic review of its investment in Exolum.

"We have concluded that we will stay invested to support the ongoing and planned energy transition of the business," the spokesperson said.

Two sources said bidders were wary because the company faces challenges as it needs to navigate an international push into low-carbon fuels.

Exolum, which started as a state-controlled oil service firm in 1927, is also backed by CVC, which owns a 24.84% stake, Australia's Macquarie with 19.87%, followed by Credit Agricole, Dutch pension fund APG and Canadian state insurance agency WSIB.

The company posted net profit of 213.8 million euros last year, on revenue almost entirely from storing and transporting oil and oil-related products through its network of pipelines.

It has said it is committed to developing alternative energy projects with technology including green hydrogen and biofuels.

Exolum manages 6,000 kilometres of oil pipelines and 10.5 million cubic metres of oil products storage capacity in Spain and Britain.

It has also invested in infrastructure projects in Ireland, Germany, the Netherlands, Panama, Ecuador and Oman.

(Reporting by Andres Gonzalez and Isla Binnie, editing by Cynthia Osterman)

By Andres Gonzalez and Isla Binnie