EXCLUSIVE Petrobras and EIG near deal for Bolivia-Brazil gas pipeline -sources

A man walks in front of the headquarters of Petroleo Brasileiro S.A. (Petrobas) in Rio de Janeiro
A man walks in front of the headquarters of Petroleo Brasileiro S.A. (Petrobas) in Rio de Janeiro, Brazil March 9, 2020. REUTERS/Sergio Moraes

SAO PAULO/RIO DE JANEIRO, March 14 (Reuters) - State-run Brazilian oil company Petrobras is close to reaching an agreement to sell to U.S. private equity firm EIG Energy Partners control of a natural gas pipeline that connects Bolivia and southern Brazil, three people with knowledge of the matter told Reuters.

Petroleo Brasileiro SA, as the company is formally known, is expected to receive more than $500 million for the 51% stake in TBG, added one of the sources, who requested anonymity to discuss private negotiations. The bid could reach up to $1 billion depending on details of the talks.

Under negotiation is Transportadora Brasileira Gasoduto Bolivia-Brasil (TBG), which operates the Brazilian section of the pipeline, called Gasbol.

The roughly 2,600 km (1,600 mile) pipeline system is the main transportation network for natural gas in the south of Brazil. It generated more than 900 million reais ($180 million) of operating profit for its owners in the first nine months of last year.

Gasbol can transport up to 30 million cubic meters per day (1.1 billion cubic feet per day) of natural gas from Bolivia to consumer markets in Brazil.

Petrobras declined to comment on the talks. EIG did not immediately respond to a request for comment.

Last year, EIG sold a 27.5% stake in TBG to Fluxys Belgium NV (FLUX.BR) for an undisclosed amount in order to remove a regulatory conflict that could have prevented it from bidding for control of the asset. read more

TBG will be the third gas pipeline company privatized in recent years in Brazil.

In 2016, Petrobras sold Nova Transportadora do Sudeste (NTS), which runs through southeastern states, for $5.2 billion to a consortium led by Canada's Brookfield Asset Management (BAMa.TO) and Brazil's Itausa SA (ITSA4.SA) .

In 2019, Petrobras sold pipeline company TAG for $8.7 billion to France's Engie and Canadian pension fund CDPQ.

($1 = 5.0939 reais)

Reporting by Tatiana Bautzer in Sao Paulo and Gram Slattery in Rio de Janeiro Editing by Brad Haynes and Matthew Lewis

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Thomson Reuters

Washington-based correspondent covering campaigns and Congress. Previously posted in Rio de Janeiro, Sao Paulo and Santiago, Chile, and has reported extensively throughout Latin America. Co-winner of the 2021 Reuters Journalist of the Year Award in the business coverage category for a series on corruption and fraud in the oil industry. He was born in Massachusetts and graduated from Harvard College.