Dec 4, 2019
By 2030, Brazil is expected to more than double net natural gas production, according to a projection by the state-run Energy Research Company (EPE) linked to the Ministry of Mines and Energy. The estimate predicts a jump from the current 59 million to 147 million cubic meters (m³) per day.
The data was presented during the launch of the publication Natural Gas Perspectives in Rio de Janeiro 2019, organized by the Federation of Industries of the State of Rio de Janeiro (Firjan). The document brings information and analyzes of interest to the market, in texts signed by public and private institutions that operate in the sector and made considerations at the event.
According to EPE, the main driver of growth will be production in the pre-salt layer of the Campos and Santos basins and in the post-salt layer of the Sergipe-Alagoas basin. Of the 147 million cubic meters a day, 71 million would come from the pre-salt layer.
To achieve this projection, however, the state-owned company points to the need for infrastructure expansion. This is because production will exceed the volume supported by current runoff routes from the pre-salt fields. The transportation network to potential demand points will also require investment.
“We see the need for additional runoff infrastructure. We are talking about arriving in the pre-salt area by 2030 with 71 million m³ per day. That equates to nearly 30 million more runoff needs,” said the Director of Studies of Oil, Gas and Biofuels from EPE, José Mauro Coelho. According to Coelho, the current routes that are in operation or under construction total a capacity of 44 million m³, volume that should be reached by Brazilian production in 2026.
EPE estimates that by 2030, Brazil could become one of the five largest oil producers in the world. For EPE, significant growth in natural gas production will be linked to the country’s strategies for pre-salt oil exploration. The company recalls that between 2009 and 2018, the Brazilian natural gas production grew on average 7.6% per year. During this period, production from the pre-salt layer jumped from 1% to 51% of all national production.
Last year, Brazil ranked 32nd in the ranking of countries with the largest proven reserves of natural gas with 368.9 billion m³. The Southeast accounts for 79% of reserves, 62.5% in Rio de Janeiro. According to EPE, the state of Rio needs to be able to take advantage of this scenario to attract infrastructure investments in natural gas flow, processing and transportation; foster investments in power generation; stimulate the use of natural gas in industry and increase consumption in the industrial and transport sectors.
In the conclusions of the publication, Firjan says that the New Gas Market program, launched in July by the federal government with the aim of promoting an opening of the sector, will not immediately transform reality and will require a continuous process of dialogue. One of the challenges identified by the entity is to rethink the transportation compensation model, which impacts on the cost of the cubic meter of natural gas.
Data included in the document show that between 2016 and June 2019, the Brazilian product was 40% more expensive than that imported from Bolivia and that prices in Germany, the United Kingdom and the United States are even lower. According to Firjan, today the national supply of natural gas in the country represents 70% of the total. The rest of the offer is imported.
The publication also brings details of the regulatory agenda proposed by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) to ensure greater predictability to the market. The agency linked to the Ministry of Mines and Energy plans to publish a standard that establishes the criteria of autonomy and independence of natural gas carriers. In addition, it wants to regulate interconnection between pipelines and revise rules related to transport tariffs.
The agenda cites measures planned for 2021, 2022 and 2023, including the creation or review of rules on transfer of revenue between carriers, registration of purchase and sale contracts for natural gas, transport capacity of pipelines and access to liquefied natural gas (LNG) terminals.
Source: Agência Brasil