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Q&A: Braskem’s Voqen to search for gas opportunities

  • Märkte: Electricity, Natural gas
  • 03.02.23

Brazilian chemical company Braskem, one of the largest energy consumers in Brazil, started its own energy trading company, Voqen, to meet the needs of Braskem and market to other companies. Argus talked to Claudio Lindenmeyer and Fabio Yanaguita, the company's natural gas trading and power trading directors, respectively. Edited highlights follow:

What are the prospects for the Brazilian natural gas and energy markets in 2023 and 2024?

Lindenmeyer: In the gas market, Voqen is looking for contracts or competitive gas trade opportunities, either for Braskem or other customers. But today there is a restriction on the competitive molecule, either because the distributors have done a good job and signed up — keeping customers in the regulated market — or other factors. At this moment, we are not sure about what will be done at state-controlled company Petrobras and there is still a lack of competitive molecule and regulatory issues that make migration [to the competitive market] difficult, in addition to extra costs, such as penalties — which are not available in the regulated market — contract management and tax issues. Such inefficiencies and regulatory and tax issues need to be addressed for migration to be competitive. We will continue looking for these businesses, working so that the ANP regulator's agenda is continued and for harmonization between the states.

But we still see that supply will be tight for the gas market in 2023 and that there will be more opportunities in 2024. We still do not see an opportunity for migration in 2023. We will continue in the regulated market, but we continue to look for opportunities.

Yanaguita: We need more definitions from the government in the power market. We still don't have the team for the new ministry, which is taking longer than we expected. The energy sector is strategic for the country not only as energy, but as a policy. We need to understand what the government's position will be, whether it will be more pro-market or more controlling. PL 414 — the power sector modernization — is still unknown. And it came from another administration that had a different ideology. It's clear that we need to modernize and that the industry needs better risk allocation than today's industry.

As Voqen, we have more possibilities to act. This is a good moment for electricity consumers. In addition, Braskem has been working hard on the electricity self-production agenda. Voqen is also waiting for decisions on distributed generation. Some customers have asked us for this information. There may be an opportunity there.

What does Voqen think about Brazil's biomethane expansion?

Lindenmeyer: Biomethane is part of Voqen's purpose, which is to support the chain's energy transition. And biomethane is key for that. Today, we are working to try to find an economic model that makes sense for both the consumer and the generator.

Which model seems more viable for biomethane today?

Lindenmeyer: There are several paths, starting with the project being competitive, with the definition of the technological path. There is the issue of proximity of investments in the existing network of pipelines. We need to think about who makes the investment and how. Then there is the discussion of an "environmental service" and how much it costs. Today, we do not have this obligation and we think that the new federal administration will enforce this more.

There are many variables that need to be considered. Our goal is that the model makes sense from all sides. We want producers to obtain financing with their pricing and for them to be able to pay for their investments. The consumer wants to pay something fair. There are many variables and we are trying to find a middle ground. The agenda is closely linked to [biogas producers association] Abiogas itself as well.

It is hard to say how long it will take us to find that path. It depends on the consumers' appetite as well. We know of consumers who have had that appetite. It will depend on how much the customer is able to pass on their product's cost, whether they are able to pass on their pricing and whether they are able to export their product.

How is the energy transition in electricity?

Yanaguita: We are in an interesting moment, because the ESG agenda hit big corporations hard but most people don't know what it is or how to apply it. The industry as a whole is still learning more about the subject. Our shareholder Braskem has a super robust ESG department and we interact with them often, but even so we are still far from being knowledgeable in the area. Without knowledge, there is no demand for ESG. There is a very large offer in Brazil for a small demand — through International Renewable Energy Credits (IRECs) — because the renewable energy park is so large and certifiable.

I believe in this certification, we work with this product, but I don't see a liquid, fast market with varying margins.


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