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Petrobras to end gas supply to NE distributors

  • Märkte: Natural gas
  • 03.08.21

Brazilian state-controlled Petrobras informed gas distribution companies in northeastern Brazil that it will not renew gas supply agreements that expire at the end of this year.

Petrobras said the lease of its Bahia regasification terminal along with the sale of northeastern gas fields will usher in new suppliers to meet local demand. But the company added it is willing to offer "temporary solutions" to guarantee supplies for the region.

The northeast has already made progress towards diversifying supply. Late last year, Pernambuco-state distributor Copergas reached an agreement with Shell for 750,000 m³/d of gas in 2022 and 1mn m³/d in 2023.

And last week, Rio Grande do Norte state-controlled distributor Potigas reached a supply deal for up to 236,000 m³/d with local independent PetroReconcavo subsidiary Potiguar E&P.

Five other distributors in the region are currently in the process of negotiating supply agreements for 2022.

Despite Petrobras' decision, there are no risks of supply interruptions, according to an industry source consulted by Argus, who added that the decision aligns with the ongoing opening of the gas market.

Nine companies submitted offers in the region's supply tenders which started last year, including local energy firms Oncorp and Ebrasil, France's TotalEnergies, Shell, local gas trading firm Compass and Golar Power, which has since been acquired by US firm New Fortress Energy.

Petrobras also participated in the tender, but its decision not to renew its contracts will clear the way for new suppliers in the region, consistent with the company's 2019 agreement with anti-trust regulator Cade.

The decision comes as two new regasification terminals are scheduled to begin operating in Pernambuco state, one led by OnCorp and the other by New Fortress.

Additionally, there is growing expectation that Petrobras will reach a long-awaited agreement to lease its 20mn m³/d Bahia regasification terminal as negotiations with US firm Excelerate Energy advance.

In the first quarter, northeastern distributors consumed 15.5mn m³/d of gas, according to the Brazilian gas distributors' association Abegas.


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