Engie, Mubadala, Macquarie groups bid for Petrobras pipelines, say sources: Reuters

At least three consortia, led by France’s Engie SA (ENGIE.PA), Australia’s Macquarie Group Ltd (MQG.AX) and the United Arab Emirates’ sovereign wealth fund Mubadala Development Co, delivered proposals for a Brazilian gas pipeline network owned by state oil company Petrobras, three people with knowledge of the matter said.

Friday was the final day for the delivery of proposals, in the first phase of the process to acquire a 90 percent stake in Transportadora Associada de Gás SA, the Petrobras unit known as TAG, which owns 4,500 kilometers (2,800 miles) of pipelines in northeast Brazil.

The sale of TAG is part of a plan by Petrobras, as Petróleo Brasileiro SA (PETR4.SA) is known, to raise $21 billion from asset sales this year and next in order to reduce its $95 billion debt load – the largest among oil majors.

TAG’s sale is expected to be one of the largest Petrobras divestitures in the program. Reuters disclosed in October that 20 groups, which formed consortia because of the size of the deal, were interested in bidding.

The deal is expected to attract bids ranging from $5 billion to up to $7 billion, according to two of the sources.

Petrobras declined to comment on Tuesday on the bidders.

Engie, asked to confirm that it had delivered a bid, only said in an emailed reply that it is “interested in investments in assets in the gas sector and considers good opportunities in Brazil.”

Macquarie declined to comment while Mubadala did not immediately comment.

Macquarie, the world’s largest manager of infrastructure funds, has partnered with the Canada Pension Plan Investment Board, known as CPPIB, and Singapore’s sovereign wealth fund GIC Pte Ltd, according to one of the sources. CPPIB also declined to comment, while GIC did not immediately comment.

Mubadala has partnered with EIG Global Energy Partners LLC, according to one of the sources. EIG also did not immediately comment.

Brazilian investment firm Pátria Investimentos Ltda, which has a partnership with U.S. buyout firm Blackstone Group LP (BX.N), did not deliver a proposal, according to the people, who requested anonymity because the process is private.

Brazilian firms Cambuhy Investimentos Ltda, which manages investments of the billionaire family Moreira Salles, and Itaúsa Investimentos Itaú SA (ITSA4.SA), a holding company with business interests spanning the banking, consumer goods and chemical industries in Brazil, also joined Macquarie’s group, according to the source.

The sources did not elaborate on the partners chosen by Engie.
Patria, Blackstone, Itaúsa and Cambuhy all declined to comment.

Petrobras sold another gas pipeline network in southeast Brazil last year, known as Nova Transportadora do Sudeste, to a group led by Canada’s Brookfield Asset Management, for $5.2 billion.

That left TAG with a network in the northeast known as Nova Transportadora do Nordeste, which is responsible for a smaller share of the country’s natural gas consumption.

Although it is now selling a smaller network, Petrobras expects a higher price due to better perspectives for economic growth after Brazil’s harshest recession in decades, according to two of the sources.

Petrobras raised $1.5 billion last week by selling about 29 percent of its fuel distribution unit, Petrobras Distribuidora SA (BRDT3.SA), in an initial public offering.

This week, Petrobras announced the sale of a 25 percent stake in the offshore Roncador field to Norway’s Statoil for $2.9 billion.