Brazilian state-controlled oil giant Petrobras, as well as agreeing two new asset sales deals over the past week, has also confirmed the previously announced sale of a 90% interest in its TAG pipeline subsidiary, writes Gareth Chetwynd.

TAG is being acquired by a group formed by Franco-Belgian concern Engie and the Canadian fund CDPQ in a deal that is worth as much as $8.6 billion, to be paid on the transaction closing date, Petrobras said.

This amount includes the payment, by the buyer, of TAG’s debts of approximately $800 million with Brazil’s National Development Bank (BNDES).

TAG operates a pipeline system spanning 4500 kilometres in length and offering capacity for 74 million cubic metres per day of natural gas, linking the gas-rich south-east and the gas-hungry north-eastern regions of Brazil.

Petrobras said it will continue to use natural gas transportation services rendered by TAG through contracts already in force between the two companies, with no impact on its operations and the delivery of gas to customers.

Petrobras has been making a sustained push to dispose of non-core assets and uses the proceeds for de-leveraging debt.

"Today is an important day for Petrobras with the execution of three relevant transactions. Continued portfolio management contributes to improving capital allocation, thereby increasing value creation for our shareholders, as well as making it possible to reduce the company's indebtedness and cost of capital", said chief executive Roberto Castello Branco.

Weekly

Engie group to take over TAG pipeline subsidiary