<article><p class="lead">Small-scale LNG can be a stepping stone to reach new natural gas consumers in Brazil, which can later be connected to pipelines, according to a study by the country's energy research bureau (EPE).</p><p>Brazil has around 9,400km of transportation pipelines and 40,000km of distribution pipelines, mostly in coastal and metropolitan areas. EPE said trucks can be a good option to transport less than 1mn m³/d of compressed or liquified gas, as investments in pipelines for such small amounts are futile. Therefore, truck delivery can be a first step to develop new gas clientele, and other logistics can be developed when consumption increases.</p><p>Compressed gas could be a starting point for companies that need to make deliveries on a range of up to 1,000km. A shift to a small-scale supply could pay off when demand reaches around 500,000 m³/d, EPE said, and investment in pipelines would make sense once that cluster of consumers reach 6mn m³/d.</p><p>The current cost for small-scale LNG — considering gas treatment, liquefaction, trucked transportation and delivery — ranges from $7.61-14.36/mnBtu. The cheapest option considers a distance of up to 400km and at most 283,000 m³/d, and the most expensive considers 1,200-1,600km of transportation and up to 85,000 m³/d.</p><p>"One of the biggest challenges for Brazil to develop its gas market is to increase the fuel transportation's capillarity along with competitive prices to regions that are currently unattended," EPE's study said. "But, because natural gas is a replacement fuel, the market must develop new penetration strategies in regional energy matrixes, such as reaching out to new thermal, industrial and residential consumers."</p><p>The study points out that opting for LNG-powered trucks would decrease costs, while gas trucks are the second least expensive option to deliver gas on trucks. But gas-fired trucks' range are limited to 500km in Brazil, which leads some companies to opt for diesel-fired trucks to deliver natural gas, EPE said.</p><p>Cryogenic carts for trucks make up 70pc of the budget in projects that deliver gas by trucks in Brazil. Diesel is responsible for 68pc of the operation costs when projects use trucks powered by the fuel, and tire replacement takes up 10pc.</p><p class="bylines">By Flávia Pierry</p></article>
