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EIG agrees to sell minority interest in Transportadora Brasileira Gasoduto Bolívia-Brasil

Published by , Editorial Assistant
World Pipelines,

EIG Global Energy Partners has announced it has signed a definitive agreement with Fluxys for the sale of EIG’s approximately 27.5% stake in Transportadora Brasileira Gasoduto Bolívia-Brasil (TBG). TBG owns and operates the Brazilian section of the Bolívia-Brazil pipeline (GASBOL), an approximately 2600 km (1600 mile) natural gas pipeline system, including the main natural gas transportation network in the south of Brazil.

GASBOL is capable of transporting up to 30 million m3/d (1.1 billion ft3/d) of natural gas from Bolivia and Brazil’s offshore pre-salt fields to key markets in Brazil. The sale is expected to close in approximately two months following satisfaction of certain conditions precedent. EIG and Fluxys will also explore further strategic cooperation in Brazil’s gas infrastructure market.

EIG has invested in the Brazilian energy market for more than two decades, with EIG-managed funds committing over US$2 billion to energy-related infrastructure projects in Brazil in the last ten years alone. With a focus on long-term fundamentals, EIG has taken strategic positions in key Brazilian energy and infrastructure assets. In addition to GASBOL, EIG has invested in Gas Natural Açu (GNA), an operational LNG terminal, natural gas and power hub with 6.4GW of gas-fired power under development at the Port of Açu. GNA is a partnership with BP and Siemens and has entered into binding agreements with State Power Investment Corporation of China to join as an additional partner subject to satisfaction of certain conditions precedent. Through GNA, EIG is investing in GASINF, GASOG and GASOFF, three natural gas pipelines capable of connecting offshore pre-salt gas and LNG to Brazil’s gas transportation network, ultimately including GASBOL, through a connection with NTS. EIG also owns a controlling interest in the Port of Açu through its investment in Prumo, which controls Brazil’s only privately held deep-water port capable of handling the largest oil tankers, known as VLCCs. Açu Petroleo has exported over 200 million bbls of pre-salt crude oil, has a maximum capacity of 2.1 million bpd and is developing a crude oil storage tank farm and two additional pipelines connecting the terminal to the crude oil transportation network in Rio de Janeiro state. In addition to oil, gas and power, EIG’s comprehensive strategy in Brazil includes renewables and low carbon investments through a “Green Hub” under development at the Port of Açu.

R. Blair Thomas, EIG’s Chief Executive Officer, said, "We are thrilled to have reached agreement with Fluxys for the sale of our interest in TBG. It has been a privilege to support the growth and development of GASBOL, critical infrastructure that delivers natural gas to key markets in Brazil, including Sao Paulo and the industrial regions in the southeastern part of the country. This investment underscores our dual commitment to supporting growth and development in this important region of the world while creating value for our investors. Today’s sale positions the EIG portfolio for additional opportunities in Brazil, and we look forward to partnering with Fluxys where possible.”

Pascal De Buck, Chief Executive Officer of Fluxys, said, “We look forward to joining the existing shareholders of TBG and developing our cooperation with EIG in Brazil’s gas infrastructure market. It is important to continue the development of TBG’s key infrastructure, which is capable of providing Brazil with roughly one-third of its daily natural gas supply. Our aim is to bring to TBG’s Board our industrial experience with gas infrastructure in regulated environments and support the progress of the company through this knowledge sharing.”

Mr. Thomas continued, “Looking ahead, we believe that the market dynamics for natural gas infrastructure in Brazil are very favorable, positioning the sector for extraordinary growth. We remain committed to the ongoing strategic relationships we have established with Fluxys and our partners in Brazil.”

Santander acted as financial advisor to EIG in connection with the transaction, and Paul Hastings and Stocche Forbes served as EIG’s legal advisors. Citi acted as financial advisor for Fluxys, and Linklaters and Mattos Filho served as Fluxys’ legal advisors.

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