EIG Plans to Bid for Brazil Pipeline as Petrobras Sets Deadline

(Bloomberg) -- EIG Global Energy Partners plans to bid for Petrobras’s TAG natural gas pipeline network as the Brazilian oil giant is giving bidders just another three weeks to raise their offers.

The state-run company released details on the leading offer to the other two competing groups, and they’ll have until April 2 to come up with final bids, EIG Chief Executive Officer R. Blair Thomas said on the sidelines of CERAWeek by IHS Markit conference in Houston. EIG expects all three groups to submit offers, he said.

The offer price is expected to range between $8 billion and $9 billion, according to people directly involved in the process. EIG is bidding 50-50 with Mubadala Development Co., while two other groups, one led by French utility Engie SA and the other by Sydney-based Macquarie Group Ltd., are also expected to present new bids.

“I assume all three consortia will bid,” Thomas said

Thomas declined to comment on a price tag for the deal, and said EIG is currently working with several banks and is yet to decide on its financing strategy. Petrobras declined to comment.

Petrobras Chief Executive Officer Roberto Castello Branco said in a March 10 interview that the sale could be finalized soon and that it could be the company’s biggest-ever asset divestment. He also said that as many as three groups were competing. Engie Chief Executive Officer Isabelle Kocher said Feb. 28 that the company was still interested in TAG.

Highest Bid

On the first round of bids, Engie placed the highest bid with Canadian pension fund Caisse de Depot et Placement du Quebec, of about $ 8 billion.

Macquarie led a group with Canada Pension Plan Investment Board, GIC Private Ltd. and Itausa - Investimentos Itau SA.

The pipeline network, Transportadora Associada de Gas, spans 10 states in northern Brazil, and is a main part of the company’s plans to sell about $27 billion of assets to help it slash debt and focus more resources on its core offshore oil production.

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