Spanish- American- Argentinean consortium acquires stake in CEG and Riogas

Jul 29, 1997 02:00 AM

July 14, 1997 A Spanish-American-Argentinean consortium was the successful bidder in the privatisation of CEG, Rio de Janeiro's municipal gas distribution company, and Riogas, the gas distribution company in the interior of the state of Rio de Janeiro. The winning bid for a 56.4 % stake in CEG and a 75 % stake in Riogas was approximately $ 576 million.
Serving over 550,000 residential customers and 1,000 industrial customers with a 2,200 km pipeline network, CEG distributes natural gas, manufactured gas and LPG with average sales of 63 million cubic feet per day (mm cfpd) or 22 % of Brazil's gas consumption. Riogas serves large industrial customers with average sales of 56 mm cfpd or 21 % of Brazil's gas consumption.
CEG consists of Enron (45 %), Spain's Gas Natural SDG S.A., (33.5 %); Iberdrola Investimentos Sociedade Unipessoal LDA, part of Spain's second largest electric utility (17.5 %); and Argentina's Pluspetrol Energy Sociedad Anonima with 4 %. In Riogas however, Enron affiliates are acquiring 50% of the equity and Gas Natural the remaining 25 % offered. Gas Natural will serve as the operator for the consortium.Kenneth L. Lay, chairman and CEO of Enron Corp. noted that through this acquisition, Enron is expanding its investment in Brazil to include a new segment of the energy industry. Enron is a participant in both the Bolivian and Brazilian sides of the almost 2000-mile natural gas pipeline project, which will carry Bolivian gas to markets in Brazil. Enron also holds a 25 % interest in the capitalised Bolivian pipeline system, Transredes, S.A. and was recently awarded a contract to build a 480 MW power plant in Brazil's western state of Mato Grosso by the regional utility Eletronorte.

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