Brazil gas pipeline connection would bypass Petrobras

Brazilian regulators are considering a request to connect the country's two largest pipeline networks, providing a means for carriers to bypass a Petrobras facility.

Gas pipeline company TAG is seeking approval from Brazil's Oil and Natural Gas Regulation Agency (ANP) to build the 850-meter, 24-inch interconnection pipeline in Macae, Rio de Janeiro. It would allow carriers to bypass Petrobras' Cabiunas terminal facility when carrying gas from Campos basin in Rio de Janeiro onshore to Sao Paulo, Minas Gerais and Vitoria states, and also from Bolivia through Gasbol.

The project would cost about R14.34mn ($2.7mn) and could be ready for gas transportation in May 2022, according to files submitted to ANP by TAG.

The interconnection would join the 179km pipeline Cabiunas-Reduc III operated by NTS with the 303km pipeline Cabiunas-Vitória operated by TAG, near the natural gas processing facility of Cabiunas that is operated by Petrobras.

ANP last week opened a public hearing on the proposal and is receiving comments until 30 May.

Besides connecting the NTS and TAG pipelines, the interconnection would allow carriers to avoid using the Petrobras facility for gas processing. The new gas law requires processing and liquefaction/ gasification facilities to provide access to all players. However, it is still unclear how Petrobras, the owner of most the accessory gas facilities in Brazil, will allow competitors to use its facilities and at what cost.

Campos basin is the second biggest oil and gas production basin in Brazil, responsible for 15pc of Brazilian natural gas production. Several gas pipelines from Campos basin are planned to start operations in the next few years, such as pre-salt route 5, with a natural gas processing unit at Açu Port in Sao João da Barra, Rio de Janeiro. In Macae, another port complex is expected to hold a regasification facility.

The new gas law, approved in March, changes the model for concession of rights to build new transportation pipelines. Under the previous rules, companies would have to participate in tenders to bid on the right to build a pipeline segment and operate it for a pre-determined period, during which they would receive a regulated public tariff. Now, companies interested in building a pipeline submit a proposal to ANP, which then analyzes the project and submits it to a public hearing before deciding whether to authorize the new route. With ANP's authorization, companies can build a pipeline network and allow access to gas carriers for a transportation fee.

By Flávia Pierry