BG to sell Brazilian gas distribution business Comgas to Cosan for $1.8 bn
04 May 2012
British gas and oil producer BG Group Plc yesterday agreed to sell its Brazilian gas distribution business Comgas to Cosan SA Industria e Comercio, Brazil's largest and the world's fifth-largest producer of ethanol, for $1.8 billion (£1.1 billion).
The acquisition of BG's stake in Comgas, will be Cosan's largest, according to data compiled by Bloomberg.
Berkshire, UK-based BG, which is looking for a buyer for its 65 per cent stake (worth $900 million) in India's Gujarat Gas, is selling its 60.1 per cent stake in Comgas as part of its plan to hive off downstream assets worth $5 billion and focus on more lucrative upstream oil and gas production projects.
Sir Frank Chapman, CEO of BG, said the disposal was part of the group's plan to release around $5 billion of capital over the next two years via strategic divestments.
Sao Paulo-based Comgás, which is 60.1-per cent owned by BG, 18.2 per cent by Royal Dutch Shell and the remaining by the public, is Brazil's largest natural-gas distribution company.
In 1999, BG and Shell acquired Comgás, in an auction, for R$1.6 billion, the highest-ever paid in Brazil at that time for a state-owned energy company.
Between 1999 and 2005, BG and Shell invested around R$1.5 billion in modernising and expanding the Comgás distribution network, which grew by more than 2,000 km.
The Comgás network comprises more than 4,000 km of pipelines that deliver natural gas to over 500,000 residential, retail and industrial customers in 57 cities.