01/11/2017 | 08:45
France’s Engie and Brazil’s Pátria Investimentos are among the 20 groups interested in a controlling stake in Petrobras’ pipeline network in the Northeast.
Petrobras will receive the first round of non-binding proposals for a 90 percent stake in the Associated Gas Company, known as TAG, by the end of November.
Other competitors for TAG, which holds 4,500 kilometers of pipelines for natural gas covering the Northeast region of Brazil, are the Canada Pension Plan Investment Board (CPPIB), EIG Global Energy Partners and Abu Dhabi Mubadala Development, sources added.
Singapore’s GIC Pte sovereign wealth fund, which bought a minority stake in a pipeline network in Brazil’s Southeast region, sold by Petrobras last year, is also analyzing a possible offer, sources said.
Petrobras, EIG, Engie, GIC and Mubadala did not immediately comment on the issue. The CPPIB declined to comment.
The sale of TAG is an important part of Petrobras’ divestment program, which is expected to add up to 21 billion dollars between 2017 and 2018, as the company seeks to reduce its $ 95 billion debt, the largest in the oil industry.
The deal could be one of Petrobras’ biggest divestitures this year, as Petrobras expects more investor interest as Brazil slowly recovers from its worst recession in a century.
One source said Petrobras aims to reach a price above $ 5.2 billion paid by a group led by Brookfield Asset Management for another pipeline network, the New Southeast Carrier.
Although TAG has a smaller grid and serves an area with lower gas consumption, better growth prospects as the economy grow could justify the higher price, according to sources.