Cosan bids for Petrobras stake in gas distributor

Compass Gas, the natural gas subsidiary of Brazilian energy and logistics conglomerate Cosan, made a bid to acquire a 51pc stake in Gaspetro, the gas distribution holding company of Brazilian state-controlled Petrobras.

Gaspetro owns stakes in 19 distribution companies, which accounted for 37pc of the gas distributed in Brazil in 2019. These companies control over 10,000km (6,200mi) of gas pipelines and distributed roughly 29mn m3/d of gas last year.

The bid, whose value was not disclosed, still needs to be approved by Petrobras and would also need to receive regulatory approval.

Japan's Mitsui Gas owns the other 49pc stake of Gaspetro, which it acquired from Petrobras in December 2015 for R1.93bn ($343mn).

Compass already controls Brazil's largest gas distributor Comgas, which has 31pc of the domestic market.

Compass filed to hold an initial public offering earlier this year to raise roughly R3.35bn, but the offer was suspended because of adverse market conditions.

The company is developing two important projects to diversify gas supply, including a 14mn m3/d regasification project on the Sao Paulo coast. Construction on the R670mn LNG terminal is expected to begin later this year, with operations to kick off in first quarter 2022.

Compass is also developing a 267km offshore gas pipeline project known as Rota 4. The 21mn m3/d pipeline, which will transport gas from Brazil's pre-salt gas deposits, is scheduled to begin operating in 2027.

Petrobras' sale of Gaspetro is part of a broader July 2019 agreement with anti-trust regulator Cade that requires the company to exit the gas transport and distribution sector.