Brazil's natural gas prices increased in June and July despite June volumes rising by 21pc from a year before.
Spot gas prices are exceeding R2/m³ ($0.36/m³), after averaging R1.40/m³, including a low of R0.99/m³, in May, according to traders.
Gas made available to the market — the volume delivered to market participants after reinjections, flaring and consumption for production facilities, such as platforms — rose to a peak 55.4mn m³/d in May from around 51.5mn m³/d in January, according to oil and gas regulator ANP. June volumes reached almost 53.9mn m³/d, a 21pc rise from a year before and a 4.7pc hike from June 2024.
This growth in market supply reflects not only higher production — Brazil produced a record-high 181.6mn m³/d in June, up by 21pc from a year earlier and by 13pc from January, according to ANP — but also the impact of new infrastructure and broader industry contributions. Brazil reinjects a large portion of its gas output to sustain crude production, especially in the pre-salt, making the available-to-market metric more relevant than production figures.
ANP has yet to release July data.
State-controlled Petrobras played a central role in unlocking this supply. Its first-half 2025 output rose by 6.3pc, according to its second-quarter earnings report, thanks to increasing operations at the Boaventura complex. The second of two modules of the gas processing unit, with combined capacity of 21mn m³/d, started operations in May. That allows gas from pre-salt fields to reach the market via the hub in Rio de Janeiro state, part of the Rota 3 pipeline project. The Rota 1 and 2 pipelines are both connected to Sao Paulo state.
Other producers also contributed to the rise in supply. Eneva increased its output in the Parnaiba basin, expanding liquefaction and deliveries. Production from Shell and Portugal's Galp, which own stakes in key pre-salt fields, increased thanks to new floating production, storage and offloading units coming on line. Output from Norway's Equinor, France's TotalEnergies, Spanish-Chinese joint venture Repsol-Sinopec and Brazilian independents Brava and Petroreconcavo also rose because of offshore partnerships and revitalized onshore assets.
Yet, increased thermal power demand has helped prevent spot prices from dropping accordingly.
Gas consumption by power plants steadily increased to 33.5mn m³/d in July from 22.2mn m³/d in June and 18.4mn m³/d in May, according to grid operator ONS. But all those figures remain below corresponding 2024 levels, when thermal demand regularly exceeded 40mn m³/d.
While gas-fired thermal demand is recovering, it has yet to reach last year's peaks and may never, based on forecasts of rainfall and hydropower reservoir levels, according to market participants — leaving room non-thermal consumers to absorb that supply further.
