Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR) expanded its presence in natural gas distribution Thursday, snapping up Gas Brasiliano Distribuidora S.A. in a $250 million deal.
Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR)
expanded its presence in natural gas distribution Thursday, snapping up Gas
Brasiliano Distribuidora S.A. in a $250 million deal.
Petrobras, as the world's second-largest oil company by market value is also
known, purchased the
Sao Paulo
state
natural gas supplier from Italian oil and gas company Eni SpA (E).
Gas Brasiliano serves
Brazil
's key
industrial heartland of
Sao Paulo
state, a market that Petrobras wants to further tap in an effort to boost
natural gas consumption. Gas Brasiliano supplies natural gas to industrial,
commercial, residential and transportation companies in 375 cities in towns in
Brazil
's
most populous state.
Petrobras has been ramping up its gas distribution assets in recent months as
the company attempts to expand the use of natural gas in
Brazil
. The
company also expects a surge in natural gas production as recently discovered
offshore oil reserves, which are rich in natural gas, come onstream.
Earlier this year, Petrobras estimated average daily consumption in
Brazil
would
reach 50 million cubic meters in 2010, up from 46 million cubic meters in 2009.
The 2010 estimate, however, was still off 2008's peak of 58 million cubic
meters a day--set before the financial crisis and global economic meltdown
sapped growth around the world.
Petrobras recently completed several sections of a nationwide natural gas
pipeline to improve distribution, as well as started auctions of natural gas to
increase supplies of the clean-burning fuel.
"For Petrobras, this acquisition will position the company as a
distributor in the largest Brazilian market for natural gas, the
Sao
Paulo
region," Petrobras said in the filing.
The company also noted that the
Sao Paulo
market was close to the entry point for natural gas imported from neighboring
Bolivia
via
the Gasbol pipeline.
Brazil
imports more than 30 million cubic meters of natural gas a day from
Bolivia
.
In 2009, Gas Brasiliano recorded sales volumes of 529,000 cubic meters a day,
with a distribution network of 734 kilometers.
The sale is subject to adjustments based on net debt and working capital at
closing.
Petrobras shares opened 1.9% higher at 27.56 Brazilian reals ($14.95) shortly
after the opening bell on the Sao Paulo Stock Exchange, or Bovespa.
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