<article><p>Brazil's state-controlled Petrobras says it has initiated negotiations for the sale of its regional natural gas pipeline subsidiary Nova Transportadora do Sudeste (NTS), part of the company's plan to shed around $14bn in assets this year. </p><p>NTS, which owns the company's pipeline network in populous southeastern Brazil, and Nova Transportadora do Nordeste (NTN), owner of pipeline assets in the northeast, had been held by the company's subsidiary Transportadora Associada de Gás (TAG). In July 2015, the company reorganized its midstream portfolio in preparation for planned sales.</p><p>TAG owned a combined pipeline network stretching 6,645km (4,129mi) along the coast of Brazil, including around 2,727km in the southeastern states of Rio de Janeiro, São Paulo, Minas Gerais and Espírito Santo. </p><p>The NTS assets receive pipeline gas from Bolivia and from the Guanabara regasification terminal in Rio de Janeiro. NTS pipelines transported around 48.4mn m³/d (1.7bn ft³/d) of gas in 2014, based on the most recent data from Brazil's mines and energy ministry. </p><p>Petrobras says there is currently no offer for NTS and any agreement would still require the approval of the company's board. </p><p>NTS could fetch around $5bn, according to a financial sector executive.</p><p>France's Engie and Canadian asset manager Brookfield are among those likely to present offers, according to people familiar with talks. Neither company has commented. </p><p>In 2015, Petrobras sold its 49pc stake in gas distribution subsidiary Gaspetro to Japanese trading house Mitsui for around $500mn. </p><p>Gaspetro holds stakes in regional gas transport and distribution companies in Brazil and in companies operating the Bolivia-Brazil gas pipeline. </p><p>Last month, a federal court in the northeastern state of Bahia granted an injunction blocking the sale, after Petrobras had said it was already finalized. The company could not be reached to comment on the status of the sale. </p><p>Hit hard by tumbling oil prices and a broad corruption scandal over the past year, heavily indebted Petrobras says it will accelerate plans to sell downstream, midstream and upstream assets. The company is expected to sell fertilizer, thermoelectric and transport assets this year as it tightens its focus on core sub-salt development. </p><div id="article-footer"><p><br> Send comments to <a href="mailto:feedback@argusmedia.com" target="_parent"> feedback@argusmedia.com </a></p><p><u><a href="http://www.argusmedia.com/Info/General/News" target="_TOP"> Request more information </a></u> about Argus' energy and commodity news, data and analysis services. </p><p><i> Copyright © 2016 Argus Media Ltd - <a href="http://www.argusmedia.com/" target="_TOP"> www.argusmedia.com </a> - All rights reserved. </i></p></div></article>
