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Brazil's gas developments lead the way for multi-billion dollar projects

Gas developments lead the way

The New Gas Law, voted in 2020, is bringing the biggest shift in Brazil’s energy industry, opening the gas market to international investors for the first time. The results have been immediate, opening the way for R$76 billion in investment.

During November 2021, an important step was taken towards further market activation, with regulations agreed on governing the opening of Brazil's natural gas pipelines to third-party access - complete with pipeline company and gas supplier harmonization. This development will enable contracts to be put in place by the 1st of January 2022. The changes include information on pipeline capacity for new contracts, the agreement on the standard contract for new gas carriers, and the definition of costs. These solutions will enable gas carriers to sign transportation contracts.

Already, the Brazil natural gas pipeline company TAG signed 9 new gas carriers to access its pipeline grid in coastal states from Rio de Janeiro to Ceará and Amazonas by 2022.

LNG terminals and new projects

Following last week's signing of 9 new gas carriers by TAG, this week started with a series of developments for Brazil, as Excelerate Energy took over operations in Bahia State's LNG terminal, starting to inject natural gas into the country's pipeline network.

These developments are taking Brazil closer to the 23 new LNG terminals that are being planned - three are already in operation, two under construction, 10 in the licensing phase, and 11 undergoing initial studies, with the operating LNG terminals are strategically located in Bahia, Rio de Janeiro and Ceará.

Regarding gas prices, the recent changes are projected to lower them by 40% over the next few years, stimulating competition and attracting new international investors. However, while the new law has been passed, Brazil has to take important legislative decisions in its implementation, and the harmonization of national and state legislation.

While this is happening, states from all over Brazil have already taken the initiative, welcoming new investors, and putting their project plans forward, to increase their midstream and downstream capacity, with Rio de Janeiro leading headlines.

Rio de Janeiro attracts over $2.5 billion USD downstream in investment

Earlier this month, Petrobras announced its plans to invest $2.5 bn USD in order to expand its northern Rio refinery and build a new base-oils refining project.

At the same time, Rio de Janeiro's Guanabara Bay LNG terminal is receiving investment to increase its capacity to 30 million cubic meters per day and accommodate the influx of new gas that will be discussed during the Brazil Oil, Gas & Energy Summit.

Rio de Janeiro has been driving developments both as a city and as a state in the country's energy industry, with the city planning new midstream and downstream projects, and by being one of the first states to adapt to the New Gas Law, opening the way to international investors.

Brazil is currently investigating a potential tax on crude oil exports, as part of its campaign to protect its market from international oil price volatility, including a price-stabilization fund for domestic diesel, gasoline and LPG.

Hear more about Brazil's opportunities directly from ANP, including LNG, offshore exploration, pre-salt opportunities, the country’s energy transition plans, and more, at the Brazil Oil, Gas and Energy Summit.


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