Petrobras to present new SPA for TAG pipeline network

Petrobras is reportedly expected to present a new sale and purchase agreement (SPA) before the end of this month for the sale of its 90% stake in natural gas pipeline operator Transportadora Associada de Gás (TAG).

The company could receive as much as $7bn through the sale, Reuters reported.

TAG operates a 4,500km natural gas pipeline system that is predominantly located in Brazil’s north and northeast regions. It accounts for 47% of the country’s gas pipeline infrastructure and 26% of total gas transportation capacity.

The sale process was first initiated last year but it had to be suspended in early-2018 following a Brazilian Supreme Court injunction. The justice ruled that the company should seek approval from the National Congress of Brazil to privatise any assets.

Prior to the injunction, the company was negotiating with a consortium of France’s Engie and Canada’s Caisse de dépôt et placement du Québec (CDPQ) for the sale. If the injunction is removed, the consortium will have to present a new SPA to the market.

Earlier this month, Petrobras’ board approved a five-year investment plan comprising proposed investments worth around $84bn by 2023. These mainly focused on deepwater oil and gas exploration and production assets.

The company also aims to raise $26.9bn through asset sales and partnerships. The strategy is in line with the company’s divestment programme, with targeted divestment proceeds of $21bn in 2017 and 2018.

The sale of TAG will allow Petrobras to focus on deepwater assets.