EIG Agrees to Sell Stake in Brazilian Pipeline to Fluxys
EIG Global Energy Partners 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 2,600 km (1,600 mile) natural gas pipeline system, including the main natural gas transportation network in the south of Brazil. GASBOL can transport up to 30 million cubic meters per day (1.1 billion cubic feet per day) of natural gas from Bolivia and Brazil’s offshore pre-salt fields to key markets in Brazil.
The sale is expected to close in about 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 more than $2 billion to energy-related infrastructure projects in Brazil in the last 10 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, an operational LNG terminal, natural gas and power hub with 6.4GW of gas-fired power under development at the Port of Açu.
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 barrels of pre-salt crude oil, has a maximum capacity of 2.1 million barrels per day 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.
"We are thrilled to have reached agreement with Fluxys for the sale of our interest in TBG,” EIG Chief Executive Officer R. Blair Thomas said. “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.”
The investment underscores EIG’s dual commitment to supporting growth and development in this important region, Thomas said.
“We look forward to joining the existing shareholders of TBG and developing our cooperation with EIG in Brazil’s gas infrastructure market,” Fluxys Chief Executive Officer Pascal De Buck said. “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.”
The market dynamics for natural gas infrastructure in Brazil are very favorable, positioning the sector for extraordinary growth, Thomas said.
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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