Petrobras Pipeline Sale Sparks Interest From Investors Worldwide

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By Tsvetana Paraskova, Oilprice.com

Twenty investors—including France’s Engie, a Brazilian investment group, and an Abu Dhabi state-owned holding group—are interested in buying a majority stake in a gas pipeline network in Brazil currently owned by state firm Petrobras, Reuters reported on Tuesday, citing four people in the know.

Apart from France’s energy group Engie, the other interested potential bidders include Brazilian investment company Pátria Investimentos Ltda, Abu Dhabi’s investment company Mubadala, Canada Pension Plan Investment Board (CPPIB), private equity EIG Global Energy Partners, and Singapore’s sovereign wealth fund GIC, according to Reuters’ sources.

Petróleo Brasileiro SA, as Petrobras’ full name is, said in September this year that it was aiming to sell a 90-percent stake of its of wholly owned subsidiary Transportadora Associada de Gás SA (TAG), which holds long-term permits to operate and manage a gas pipeline system of about 4,500 kilometers (2,796 miles), located mainly in the North and Northeastern regions of Brazil.

Last week, Petrobras launched the non-binding phase for the sale of 90 percent in TAG, in which it sent information to interested parties qualified in the previous phase.

The Brazilian state energy firm expects to receive a first round of non-binding offers for TAG by the end of November, Reuters’ sources said.

According to one of them, Petrobras wants to obtain for TAG a price higher than the US$5.2 billion for which it sold 90 percent in another gas network system, Nova Transportadora do Sudeste, to Brookfield Infrastructure Partners (BIP) and its affiliates.

Nova Transportadora do Sudeste owns a bigger gas pipeline network than TAG, but the latter may justify a higher price because of better economic growth prospects and investment opportunities, according to the sources who spoke to Reuters.

TAG’s stake sale is part of Petrobras’ plan to generate US$21 billion from asset sales in 2017 and 2018.

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