Copagaz imports LPG from Argentina, diversifies supply

Brazil's leading LPG distributor Copagaz signed a short-term deal with Argentina's Transportadora de Gas del Sur (TGS) to import 7,600 metric tons (t) of LPG to supply consumers in southern Brazil.

The product will be delivered in three shipments in April and May to the Tergasul terminal in Canoas in Rio Grande do Sul state. The contract has the potential to be extended until the end of the year, Copagaz said.

This is Copagaz's second LPG import contract. In 2019, the company reached an agreement with Bolivian state-owned YPFB for 72,000 t/yr of LPG.

The deals highlight the slow diversification of the LPG market away from Brazil's state-controlled Petrobras, which is the only wholesale LPG supplier in Brazil.

Copagaz's head of sales and supply, Marcos Ferraz, said the imports contribute to guaranteeing domestic supply and reducing the risk of a mismatch between domestic and international prices.

Brazil's LPG demand has been robust over the past year because the Covid-19 pandemic has increased residential cooking. Demand for LPG reached 7.5mn t in 2020, up by 3pc from consumption of 7.3mn t in 2019, according to the Brazilian LPG distributors' association Sindigas.

Following recent lockdown measures, sales of 13kg propane cylinders used as cooking gas increased by 6pc in March, according to preliminary data from the mines and energy ministry.

Copagaz has operations in 24 Brazilian states and is now the largest domestic LPG distributor, following its 2020 acquisition of Petrobras LPG distributor Liquigas.