Brazilian power trader Migratio is partnering with natural gas logistics company GNLink to expand its business into the natural gas and biomethane market. Migratio's founder and director Fabio Saldanha spoke to Argus about the company's plans in the gas and power sectors. Edited highlights follow.
What opportunities is Migratio seeking in the biomethane market?
We recently started a partnership with GNLink. Our position is to work in biomethane production in Brazil's countryside, from landfills and organic residues. Our goal is to make investments in the development of production units with our clients, from the origination of biogas up to its treatment into biomethane. We will act on the liquefaction, storage, supply, transportation and regasification sectors.
The idea is to have a hybrid operation with compressed biomethane for small distances and volumes, while the liquid biomethane will be used for bigger volumes and distances. We already have contracts in the advanced stages of negotiations for biomethane.
We are also working with — as well as without — GNLink to import LNG and sell the fuel in Brazil. We hope to have news about both biomethane and LNG in August.
What are the biggest challenges the company faces entering this market?
It is a relatively new market, with some technical difficulties for biogas purification, to reach oil and gas regulator ANP's regulatory standards. Some of the technologies for biomethane producers are not yet completely adapted to Brazilian climatic conditions and biogas specificities.
On the other hand, the natural gas pipelines lack infrastructure. Brazil has a coastal pipeline network and only Sao Paulo state's pipelines have a little more reach into the countryside. That is why we have been focusing on highway transportation, which will also need investments in the production of tanks for the storage and transportation of biomethane. We will hire an outsourced fleet but aim to convert these vehicles to use biomethane.
What are Migratio's plans for the power market liberalization that should start next year?
Migratio has a goal of reaching 500 clients in the free power market next year and 5,000 clients in the following three years.
We are launching a platform to automatize clients' hiring cycle, to make the process easier since this might be the hardest part of the pulverized retail model.
How is Migratio positioned in the certificate market?
We already issue International Renewable Energy Credits (IRECs) and have a trading desk for them and Cbios carbon credits. We are also considering issuing GasRECs and Cbios in our biogas plants in Paraiba state.
