September 4, 2019
The opening of the Brazilian natural gas market and the growth of national production should unlock billions in investments in infrastructure, according to a study by the Energy Research Company (EPE). The state-owned company sees potential for the construction of 16 new gas pipeline networks in Brazil in the coming years.
The list ranges from offshore pipeline projects (for offshore gas flow) to onshore transport pipelines for delivery of the product to the consumer market. Details of the projects, such as the necessary investments and the analysis of economic and environmental feasibility, will be presented by EPE in the indicative plan for new pipelines in the country, about to be launched.
José Mauro Coelho, director of oil, gas and biofuels studies, says that the first edition of the Indicative Transport Gas Pipeline Plan mapped the potential of 11 new gas pipelines in the country, including old authorized projects, such as Central Brazil (Termogás project, which links São Carlos / SP to Brasilia) and the stretch between Uruguaiana-Porto Alegre, of the Sulbrasileira de Gás (TSB).
Among new projects, EPE also sees potential for duplication of the Bolivia-Brazil (Gasbol) pipeline on the stretch between Siderópolis (SC) and Porto Alegre, as well as pipelines to connect Açu’s liquefied natural gas (LNG) regasification terminals, São João da Barra (RJ), and Barra dos Coqueiros (SE) to the country’s integrated transport system.
EPE also sees potential for five new gas flow routes from offshore fields to the coast. Three new pre-salt pipelines (currently there are three routes, one of which is still under construction) and two other post-salt routes, one of them on the coast of Espírito Santo and the other in Sergipe.
All this expansion aims to transport the growing volumes of gas production in the country, especially in the pre-salt. According to EPE projections, net natural gas production in Brazil is expected to grow by 150% and reach 147 million cubic meters of gas daily by 2030 – a volume that disregards losses due to reinjection, flaring and gas consumption on the platforms. The expectation of the research firm is that if nothing is done, the current flow capacity will start to strangle from 2025.
The new pipelines will require billionaire investments. Central Brazil alone is estimated at around R$ 7 billion. Coelho said he believes that the expansion of the infrastructure will happen with private investments.
“We strongly believe in market solutions. Our plan is to characterize the pipeline for those who want to build them. Let the market decide. We believe that the carrier itself will want to expand the network. The compensation is there,” he said, when asked if the new routes will depend on Brasduto – a proposal that is pending in Congress and which foresees the creation of a fund with resources from the Pre-Salt Social Fund to finance pipelines.
The president of EPE, Thiago Barral, explains that the new plan will replace the 10 Year Plan for Expansion of the Transport Network (Pemat), which was more determinative, indicating that projects would be tendered by the government under the concession regime. According to him, the new plan was set up in dialogue with the carriers and has a purely indicative character, leaving to the private initiative the investment decision.
“The indicative plan aims, especially at this time of opening of gas transportation, to give greater visibility about the opportunities where there are potential untapped consumer markets and what are the main points of gas entry into the system,” he told reporters during a participation at Rio Pipeline.
At the same time, a bill is being considered in Congress that proposes to change the concession regime for the construction of new pipelines, from the concession to the return of the authorization model. Implemented in 2010 with the Gas Law, the concession model never really worked.