Breakdown of the gas monopoly may attract R $ 32.8 billion in pipelines and terminals, estimates MME

June 26, 2019

The government estimates that the end of the monopoly of the natural gas market could generate investments of up to R $ 32.8 billion in expansion of transportation infrastructure and fuel outflow. In addition, it sees an increase of R $ 2 billion in the collection of royalties and R $ 5.3 billion in ICMS tax per year in four benefited states.

The figures are part of a presentation released by MME (Ministry of Mines and Energy) on the New Gas Market program, whose bases were announced on Monday,  June 24  by the CNPE (National Council of Energy Policy).

The program aims to break Petrobras’ monopoly on the fuel supply by guaranteeing access of other companies to gas pipelines and natural gas import terminals. Next Tuesday, the Cade (Administrative Council for Economic Defense) must evaluate the agreement for Petrobras to sell shares in the sector.

Among the investments estimated by the MME are six pipelines (linking the platforms to the mainland), six gas processing units (GPUs, which receive and treat the fuel in the continent), eight import terminals and five transportation pipelines on shore.

From the list, a gas pipeline and a GPU are already under construction by Petrobras. A pipeline linking Comperj to the Duque de Caxias refinery and two import terminals in Sergipe and Rio are already planned by private entrepreneurs.

The program launched by the government has as basic pillars the reduction of concentration in supply, the unbundling of the chain and release of capacity in transportation pipelines for third parties and changes in the regulation of the distribution of piped gas to allow greater competition for customers.

Currently, although it owns 75% of the gas produced in Brazil, Petrobras is practically the only seller, since its pre-salt partners do not have access to infrastructure to transfer their production – one of the focuses of the program is to guarantee third party access to gas pipelines and processing units.

The government expects the entry of new gas sellers to reduce the price by up to 40%, unlocking investments in fuel-consuming industries such as petrochemicals, fertilizers, mining and glass making.

A study by consultants Carlos Langoni, Marco Tavares and João Carlos de Luca published by the Folha in May estimated a potential of up to US $ 60 billion in industrial projects over the first four years after the end of the monopoly.

With the growth of gas production, says the MME, the collection of royalties would be increased by up to R $ 2 billion in Rio, São Paulo, Espírito Santo and Sergipe, states with greater production potential. The ICMS tax from the sale of fuel would generate another R $ 5.3 billion per year for the four states.

Source: Folha SP

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