The split of Brazilian natural gas distributor Commit into two companies will bring five northeastern gas companies closer to being controlled by a new, relatively unknown group of owners.
Commit, which is jointly owned by Compass and Mitsui, will retain control of six regional gas distributors while the newly created spinoff, Norgas, will control the five northeastern companies: Rio Grande do Norte state's Potigas, Pernambuco's Copergas, Alagoas' Algas, Ceara's Cegas and Sergipe's Sergas.
The five distributors under Norgas are set to be sold to Infra Gas and Energy, a newly created company owned by businessmen João Henrique Sigaud Cordeiro and Marconi Braga Edmundo, and Infra Construction and Services. There is little in the public record about the two men and Infra. Cordeiro and Edmundo are listed in record searches as principals with Gtp Energia, Base Combustiveis and other companies that appear to be involved in business such as jet fuel sales and construction.
The sale of the five northeastern distributors of Infra Gas and Energy was given the regulatory go-ahead from Brazil's antitrust watchdog, Cade, in mid-August. The deal cannot be finalized until Mitsui and the governments of the northeastern states determine whether they will exercise options to purchase shares in the distributors within 60 days and 90 days of the split, respectively.
The sale is driven by Compass' ongoing divestment strategy that started with its acquisition of Petrobras' stake in Gaspetro, which was later renamed Commit. Luis Henrique Guimarães, chief executive officer of Compass' parent company, Cosan, said the deal will allow the company to focus on new areas of growth.
"Our primary focus is on the southeastern region," Guimarães said.
While the sale does introduce a new participant into the gas distribution business, it does not alleviate the concerns among many in the market that resources and influence will be held by a relatively small group of private interests. There is a growing apprehension about the potential consequences, including the likelihood of less openness and competitiveness — a significant divergence from Cade's preferred scenario of open, competitive markets, says Adriano Lorenzoni, president of the large energy consumers association Abrace.
Compass, part of Brazilian energy conglomerate Cosan, controls 18 state gas distribution companies. In June 2022 it agreed to sell its stakes in 12 of those distributors it acquired in the Gaspetro deal. Mitsui was already a partner in Gaspetro.
"We want to sell, we want more players in this market — and we want more groups investing as well," Guimarães said.
Under the Commit/Norgas split, Commit is keeping control of six gas distribution companies, including: 100pc ownership of the recently established Necta (formerly Gas Brasiliano); 49pc ownership of Rio Grande do Sul's Sulgas and Mato Grosso do Sul's Msgas; 41pc of Santa Catarinas's Scgas; 37.4pc of Rio de Janeiro's Cegrio; and 24.5pc of Parana's Compagas.
Compass already sold its stakes last year in four gas distributors to Termogas, all non-operational companies as of now.
Compass also announced plans to venture into the small-scale LNG sector in 2025 to demonstrate the significant influence and potential of the Cosan/Compass group. This move aims to attract consumers of less environmentally friendly industrial and transportation fuels towards natural gas, especially in remote areas lacking existing gas infrastructure.
While it offers consumers options is also highlights the group's growing role in shaping the energy landscape in Brazil.
