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Brazil’s Eneva invests in natural gas flexibility

  • Märkte: Natural gas
  • 08.05.23

Brazilian oil andgas producer and power trader Eneva is investing in natural gas contracts in the free market and sell thermal power generation in its new Sergipe state hub, which is scheduled to begin operations in 2024.

Eneva will offer custom supply alternatives to attract clients, such as lower prices, quicker delivery or more contract flexibility. The hub was created after Eneva bought Sergipe state's 21mn m³/d LNG terminal last year, which previously belonged to power generator Celse.

The company intends to sign long-term LNG import contracts in the international market, taking advantage of price opportunities and offering up to 15mn m³/d to consumers connected to the pipeline network. The hub includes the LNG regasification terminal and a thermal plant, which can use up to 7mn m³/d of natural gas to generate 1.6GW.

This month, Eneva started a marketing campaign to reach future gas buyers. It aims to attract clients interested in the flexible services that it will be able to offer once it integrates its LNG terminal to the power plant, taking advantage ofthe flexibility and storage benefits that LNG imports can offer.

"This natural gas production is not associated with oil and we can store gas in the floating storage and regasification unit (FSRU), which increases our portfolio management possibilities," Eneva's energy, natural gas and liquids commercial general manager Camila Schoti said.

The company is now searching for clients and is aiming to start supply once the LNG terminal is connected to pipeline operator's TAG network, which Eneva expects will happen by July 2024. It might be difficult to sell the gas in other pipelines at this moment, because integration costs for the use of more than one pipeline have not been defined, according to Schoti. Transportation tariffs are stacked together when more than one pipeline is used, generating a cost two or three times higher than using only one pipeline network.

Eneva will attract distribution companies and industrial consumers that are preparing to enter the free market effortlessly, according to Schoti. Consumers and distributors are looking for shorter contracts, as the Brazilian market does not offer such an option, she said. With long-term import contracts, the company will be able to avoid higher short-term prices because of international tensions, such as the Ukraine conflict, while also providing shorter contracts as it can count on both the demand from its power plant and its FSRU ability to stock gas.

Eneva is one of Brazil's largest private natural gas producers, with up to 9mn m³/d of output capacity. The company owns 12 natural gas fields in Maranhao and Amazonas states and 6.3GW of thermal generation capacity in both finished and projected plants. The decision to invest in Sergipe will allow the company to access the gas pipeline market for the first time, as its previous actives were in isolated locations not connected to the network.


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