Brazil gas distributors launch second supply tender

Five natural gas distributors from south-central Brazil launched a second joint tender offer for gas supply contracts starting in 2022.

In a first phase of the tender, the five distributors will seek up to 3.5mn m3/d of supply for 2022-23, with the goal of complementing existing contracts with state-controlled Petrobras.

In the second phase, the distributors will seek up to 6mn m3/d starting in 2024, when current contracts with Petrobras expire.

This is the second joint tender conducted by the group, but the previous offer failed to significantly expand supply beyond Petrobras.

"The first tender offer created the opportunity to strengthen ties with different players in the market, including transporters and suppliers, which allowed us to extend our technical studies for the new offer," the president of Parana-state gas distributor Compagas Rafael Lamastra said.

Each of the five distributors will issue specific tender terms in early 2021, including bidding deadlines.

The companies see potential for LNG supply for contracts starting in 2024 with the construction of LNG regasification capacity in the region.

Golar Power Latam is currently building a 100,000 m³/d liquefaction facility in Uruguaiana, Rio Grande do Sul state, which will receive pipeline gas from neighboring Argentina. The LNG will be distributed by truck across the region.

Golar Power is also awaiting final environmental approval to begin construction of its 15mn m³/d Terminal Gas Sul regasification terminal in Babitonga Bay in the municipality of Sao Francisco do Sul in Santa Catarina state.

The government of Santa Catarina has been seeking to clear bureaucratic hurdles in an effort to speed up construction of the terminal, which could boost gas supply to states in southern Brazil by 50pc. Last week, governor Carlos Moises signed a decree declaring the project in the public interest, a move that accelerates the construction process. Golar Power estimates that the project could be operational by the end of 2022.