Petrobras readies more gas to market: Borges

Brazil's state-controlled Petrobras aims to bring its delayed GasLub natural gas-processing plant online early in 2024, adding an initial 9mn m³/d of natural gas supply to the domestic market, head of exploration and production Fernando Borges said.

Contractor changes had delayed full operation of the GasLub project, including the 355km (220-mile) Rota 3 pipeline that will transport gas from offshore pre-salt fields to the processing facility, from April 2023.

Between GasLub and other projects, "Petrobras plans to double the amount of gas available to the market in the next five years," Borges said today at the CERAWeek by S&P Global conference in Houston, Texas.

Consumer groups and politicians in Brazil have criticized the amount of gas that oil companies reinject to stimulate oil production, saying that it leads to costlier gas supplies and the need for both pipeline and LNG imports. Most gas production in Brazil is associated with oil flows. Reinjections have grown to 68mn m³/d in 2022 from 60mn m³/d in 2021, according to the ministry of mines and energy. During the same period gas supplies to the domestic market have declined to 47mn m³/d, from 51mn m³/d.

Borges defended the practice, saying that of the roughly 70mn m³/d that the oil industry reinjected in 2022, only a small portion makes sense to sell.

"The press in Brazil say we must stop reinjecting gas," Borges said. "There is a proposal to tax gas that is being reinjected. But we are only holding 10pc of this gas that could go to the market."

The first 40pc of gas, or 27mn m³/d, has high CO2 content and is best used for reinjection in Petrobras' prolific offshore pre-salt fields, he said. The second 40pc, which has better specifications for domestic use, is also necessary for maintaining pre-salt production, he said. Another 10pc comes from the Urugua oil field in the Amazonian region which has no easy way to market, and is being used mostly to recover condensate.

Yet Borges said Brazil will likely need to continue importing gas, including in the form of LNG, for many years to come. Brazil has increased LNG imports in recent years, reaching a record 26mn m³/d in 2021 before decreasing to 7mn m³/d through November 2022, according to government data. Two private-sector LNG terminals that do not have to report data also import LNG to supply power generators in off-grid areas.

By Carla Bass