Brazilian is polishing off the final details to help open its natural gas pipeline system to more third parties after hydrocarbons regulator ANP last week approved referential tariffs for short-term access to pipelines.
The tariff model can be used for contracts starting on 1 January 2022, and is meant to reduce costs compared with the current methodology. ANP is slowly shifting to a distance-based rate from a postage stamp rate structure to avoid abrupt rate increases.
Prior to last week's approval, gas buyers and suppliers were in the dark about transport contract terms for 2022. The fees announced by ANP are temporary and will be updated in January 2022, since they take into consideration January 2021 prices.
For Transportadora Associada de Gas (TAG) contracts — to avoid an abrupt price change — only 10pc of the tariff will be calculated under the new method and 90pc will still be under the postage stamp method for 2022 contracts. There is no definition on when the transition for the full locational, or distance-based, tariff will happen.
If ANP had approved a sudden shift, transport tariffs for states farther from the pre-salt basins and gas consumers in Rio de Janeiro and Sao Paulo would be higher for the first year of the gas market opening, potentially dissuading gas consumers in states such as Ceara and Rio Grande do Norte.
Ceara already has the highest value in TAG's tariff matrix under the new model, of R9.2527/mmBtu ($1.654/mmBtu) for gas injected at the pipeline in Rio de Janeiro Cabiunas' Terminal (TECAB), in Duque de Caxias city.
To avoid increased transport costs for Ceara and Rio Grande do Norte, the 10pc/90pc share resulted in lower transport tariffs for all other exit states in TAG's network, since the transport tariff for Petrobras contracts is R9.24/mmBtu for shippers.
For Nova Transportadora do Sudeste (NTS) gas shippers, the tariff under the new model declined more than TAG's. Given its shorter network and closer entry and exit points, ANP defined a 20pc/80pc mix of models for the tariff calculation, but still a smooth transition, with only 20pc of the share being calculated under the new model.
In this network, the highest tariff — from the Cabiuna terminal to the state of Minas Gerais — was calculated at R8.1204/mmBtu, also lower than the current R9.24/mmBtu charged by Petrobras.
As part of the transition, ANP also slashed interconnection tariffs between networks. It reduced the interconnection tariff at Cabiunas Terminal (NTS/TAG) and at Paulínia refinery (Transportadora Gasoduto Brasil-Bolívia (TBG)/ NTS) by 80pc, only at the interconnections, to stimulate gas market integration and create incentives for gas buyers to seek supplies from beyond the nearest producer.
Further transition shares are still undefined for TAG and NTS. For TBG, it is expected to reach a 50pc/50pc share by 2024.
Defining these tariffs now instead of waiting for an update in 2022 is important as pipeline operators TAG and NTS are completing their open seasons this year.
ANP has yet to model and calculate the single market area tariffs that would allow third parties to access the three pipeline networks by the same gas shipper, including the TBG network. These are pending as the Brazilian gas market still needs further definition on the revenue transference among the pipeline companies. The differences among the companies makes this definition more challenging. TBG has amortized investments, TAG has the largest network and NTS is the closest to major natural gas production areas.
In downstream, local gas distributors were concerned about the January review of the tariffs for 2022, since current contracts with Petrobras determine the transport tariff increase in May for final consumers. But pipeline companies say this is just a matter of timing of the tariff update and will not affect final gas prices.
