Brazil gas market turmoil seen easing in 2022

Brazil's recently opened natural gas market will create solutions to avoid higher-than-expected prices within six months, according to the author of the country's new gas law in the lower house.

Four gas distribution companies have sought and received favorable court rulings requiring state-run oil and gas company Petrobras to maintain 2021 gas prices in their states, including in Sergipe where congressman Laercio Oliveira (PP party) resides.

"I believe that by the end of 2022 we will have a calmer scenario, and that we can see competition between agents and competition from domestic gas offered in greater quantities, Bolivian gas and LNG, with entry through several terminals," Oliveira told Argus.

After the efforts made by lawmakers to create the new gas law, it now is up to oil and gas regulation agency ANP to define the rules for the sector, Oliveira said.

The new gas market must also address the need for underground gas storage, which would help stabilize prices, Oliveira said.

The creation of a long-term gas contract for future supply will also be important for the Brazilian gas market, as it will help make new investment viable for industries with high volumes of gas consumption, such as fertilizers, petrochemicals, glass and ceramics, the congressman said.

"We knew that the practical results from the new gas law would take place in the medium term," Oliveira said. "It will take all the market participants and government efforts to speed to this process."

By Flávia Pierry