French-Canadian consortium seals US$8.6 billion Petrobras pipeline deal

Brazil is a key market for Engie. (Reuters picture)

PARIS: A consortium led by French utility Engie won a bid for Petrobras’ TAG pipeline arm with an US$8.6 billion offer, in a deal that boosts Engie’s presence in a fast-growing sector and will help Petrobras cut its debts.

Engie said on Monday its successful offer for a 90% equity stake in TAG was made by a consortium involving Engie and Canada’s Caisse de Dépôt et Placement du Québec (CDPQ). Petrobras will keep a 10% stake in TAG.

Engie said buying TAG would provide it with a steady stream of profits, with TAG counting for 47% of Brazil’s entire gas infrastructure.

“Our acquisition of TAG is a significant milestone for ENGIE in Brazil, a key market for the group where we have been present for 23 years,” said Engie Chief Executive Isabelle Kocher.

“It is fully aligned with ENGIE’s strategy to become the leader of the zero-carbon transition, supporting Brazil in the decarbonization of its energy mix,”

The divestment also represents a victory for Petrobras leadership and Chief Executive Roberto Castello Branco, who is pushing to unload assets in a bid to cut debt and refocus on exploration and production.