Brookfield-led group to pay $5.2 billion for Petrobras natgas unit

RIO DE JANEIRO (Reuters) - Brazil's state-owned oil producer Petrobras agreed to sell 90 percent of a natural gas pipeline unit to a group led by Canada's Brookfield Asset Management Inc BAMa.TO for $5.2 billion, the companies said on Friday.

The foreign consortium agreed to pay $4.34 billion for Nova Transportadora do Sul SA, or NTS, when the deal closes and $850 million in five years, according to Brookfield and Petroleo Brasileiro SA, as the company is formally known.

The investor group includes two sovereign wealth funds, China’s CIC Capital Corp and Singapore’s GIC Private Ltd.

Reuters reported the main terms of the deal between Petrobras and Brookfield, including the sale price, on Sept. 6, citing sources with direct knowledge of the transaction.

The sale, which is still subject to approval by shareholders and Brazilian regulators, is the largest yet in a plan by the oil company to sell $15.1 billion of assets in 2015 and 2016 and raise another $19.5 billion through divestment and partnerships between 2017 and 2018.

Petrobras preferred shares PETR4.SA, the company's most-traded class of stock, fell 3 percent in afternoon trading to 13.58 reais in Sao Paulo, as world oil prices slumped on reports Saudi Arabia does not expect the Organization for Petroleum Exporting States, or OPEC, to cut output at a meeting next week.

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Under the accord, Brookfield Infrastructure Partners Ltd BIP_pc.TO will invest at least 20 percent of value of the deal, while Brookfield Asset Management has an initial investment of about 30 percent.

NTS transports natural gas in south-central Brazil and provides the country’s most populous and industrialized states - Minas Gerais, São Paulo and Rio de Janeiro - with natural gas from Bolivia and Brazil’s offshore oil and gas fields.

Rodrigo Costa, Petrobras’ general manager for natural gas, told reporters the sale of NTS will not affect existing natural gas contracts, which expire between 2025 and 2031.

He said transport prices for that gas will be set by the contractual terms.

Petrobras, though, will not have exclusivity in pipeline usage, Costa noted.

Its Transpetro shipping and pipeline company has a management and maintenance contract with NTS that will continue in effect, he added.

He also said Petrobras is doing everything it can to make sure the deal closes by the end of this year.

Reporting by Jeb Blount in Rio de Janeiro, Arathy S Nair in Bengaluru, Brad Haynes in Sao Paulo Editing by Savio D’Souza and W Simon