Petrobras prequalifies bidders for LNG terminal

Brazilian state-controlled Petrobras prequalified 10 bidders for the long-term lease of its 20mn m³/d Bahia LNG import terminal and associated pipeline.

The roster of potential bidders highlights strong investor interest in Brazil's natural gas sector, which the government is opening up to competition by obligating Petrobras to loosen its traditional monopoly.

Under a July 2019 agreement with anti-trust regulator Cade, Petrobras is exiting natural gas distribution and transport and opening third-party access to its infrastructure.

Petrobras did not issue a timeline for the next stages of the bidding process.

Companies pre-approved to participate in LNG terminal lease tender include Shell, BP, Repsol and Total, as well as international LNG companies Golar Power Latam and Excelerate Energy. Domestic gas distributors including Bahiagas and Naturgy also pre-qualified, as did Compass Gas and Energy, a recently created gas transport and distribution company owned by Brazilian conglomerate Cosan.

The lease will not include the 20mn m³/d Excelerate Experience floating storage and regasification unit (FSRU) that is currently installed at Bahia.

The underutilized terminal is located in the Bahia state capital of Salvador. An associated 45km gas pipeline, which originates at the LNG terminal, has two gas exit points at Sao Francisco do Conde and Sao Sebastiao do Passe.

In the first four months of 2020, the Bahia terminal's LNG send-out averaged 4.34mn m³/d, according to the mines and energy ministry's monthly gas report.

The terminal is one of three controlled by Petrobras in Brazil. The others include the Pecem terminal in Ceara state and the Guanabara terminal in Rio de Janeiro, which has been idle since 2018. Despite significant unused capacity, Petrobras has not allowed third-party access to the terminals.

Until recently, Petrobras controlled all of Brazil's regasification capacity, but in March, the 170,000m³ Golar Nanook FSRU became the first independent terminal to begin operating in Brazil. And the 21mn m³/d BW Magna FSRU is scheduled to begin commercial operations in early 2021 in Rio de Janeiro state. The FSRU, which was contracted by Gas Natural Acu (GNA), arrived in Brazil last month.