Brazilian state-controlled Petrobras updated terms in at least 10 of its natural gas supply contracts with distributors, allowing for more flexible gas consumption at lower prices.
The new terms allow distributors to exceed their contracted gas supply by 5pc at a price of 11pc of the Brent index price until the end of 2025. That would be a discount to the regular contract prices of between 11.6-13.9pc of Brent.
Sergipe state's distribution company Sergas had the most contracts updated under the new terms, with all four of its Petrobras contracts included in the change. The update will allow the distributor to add 2,000 m³/d of gas supply under the discounted price.
Espirito Santo state ESGas' two contracts with Petrobras were updated, allowing for the additional supply of 37,316 m³/d. Rio Grande do Norte state's Potigas also had its two active contracts updated, with a potential addition of 7,500m³/d. Paraiba state's PBGas and Pernambuco state's Copergas had one contract updated each, with potential additions of 3,550 m³/d and 70,750 m³/d, respectively.
The need for more flexibility in contracts, allowing for quicker responses to market conditions, is seen as an important factor behind consumer migrations to the liberalized market. The move could also be a response from Petrobras to competition with other suppliers in some markets. ESGas signed a short-term gas supply agreement in July with Shell Brasil as part of efforts to reduce prices for gas consumers in Espirito Santo state. The price of the gas supplied by Shell was 15pc below the company's three other supply deals and dropped the company's total gas prices by 2pc as of August, according to ESGas.
Rio de Janeiro state's Ceg Rio updated its contracts with Petrobras to account for a 1.39mn m³/d decrease in its supply, following a new type of distribution contract between Ceg Rio and a consumer, another example of a liberalized market migration. The Petrobras-Ceg contract changed when one of Ceg's client went to the open market and just required a distribution-only contract.
Petrobras also signed a new supply contract with EsGas, due to run between 2026-2034. The 80,000 m³/d contract is indexed to 11.7pc of the Brent price, in line with many other contracts signed for the period.
Ceara state's distributor Cegas signed master contracts with Brazilian producer Origem Energia and Norway's Equinor. Both contracts only underline general terms and would need contractual addendum to become active, but they highlight Cegas' willingness to further diversify its portfolio away from Petrobras.
