Petrobras agrees to sell remaining stake in TAG to Engie and CDPQ

Brazilian state-controlled firm Petroleo Brasileiro (Petrobras) has signed a share purchase and sale agreement to sell its remaining 10% stake in natural gas pipeline company TAG to Engie Brasil and Canadian investment fund Caisse de Depot et Placement du Quebec (CDPQ).

The transaction was concluded at about R1bn ($187.5m).

In March, Petrobras began the binding phase regarding the sale of the 10% interest in TAG pipeline unit.

In April 2019, a consortium comprising French energy firm Engie and Canadian investment fund Caisse de Depot and Placement du Quebec (CDPQ) made the winning bid to buy a 90% equity stake in the TAG natural gas pipeline unit.

The consortium group acquired 90% of TAG from Petrobras last June.

In July last year, Petrobras signed an agreement with Brazil’s regulatory body Administrative Council for Economic Defense (CADE) regarding the sale of the company’s refining installations.

With the latest transaction, Petrobras fulfills one of the commitments assumed under the agreement with CADE.

Petrobras said in a press statement: “Comparing the value of this operation with the value of 90% of TAG sale in June 2019, it is necessary to consider that TAG’s debt increased from R$2bn to R$23bn, which generated a payment of R$2bn to Petrobras, already considered in the total amount disclosed at the close of the 90% stake sale, as disclosed in the third quarter 2019 result.”

Operating in the natural gas transportation segment, TAG manages and operates 4,500km of gas pipelines located primarily in the North and North-East regions of Brazil.

It has an installed capacity of 75mm³ a day.

The sale is in line with the company’s portfolio optimisation and improved capital allocation plan to maximise value for its shareholders.