Petrobras, Engie Extend Period to Negotiate Contract of Pipeline Network

Brazilian state-controlled oil company Petroleo Brasileiro SA has extended the deadline for discussion with France's Engie SA about the sale contract for a major pipeline network, two sources with knowledge of the matter said.

Engie had the highest bid among three consortia interested in acquiring Transportadora Associada de Gás SA, known as TAG. The French company and Petrobras, as the Brazilian company is known, were supposed to wrap up talks over the sale contract by Thursday, which was a holiday in Brazil.

To comply with rules set forth by Brazil's audit court, the other two consortia interested in TAG will be allowed to offer new bids for TAG considering the sale contract negotiated between Petrobras and Engie.

Petrobras has now extended the deadline for the discussion of the contract, although there is no new firm date. Other bidders will be allowed to analyze Petrobras' contract with Engie and make new offers only once it is ready.

Petrobras and Engie did not immediately comment on the matter.

The other two groups vying for the gas pipeline network are led by Australia's Macquarie Group and United Arab Emirates' sovereign wealth fund Mubadala Development Co PJSC with EIG Global Energy Partners LLC. Sources have said bids were around $7 billion.

Newspaper O Estado de S. Paulo reported earlier on Friday that Engie and Petrobras did not have a final contract for TAG.

By Carolina Mandl, Additional reporting by Tatiana Bautzer Editing by Frances Kerry