BNDES suggests shared ‘hub’ to transport natural gas from producing fields

June 2, 2020

The BNDES believes that the construction of natural gas hubs in shallow waters could be a solution to promote the exploitation of gas fields on the Brazilian coast, stimulating competition and increasing production. The proposal is part of the study “Gas for Development”.

André Pompeo, responsible for the study at the BNDES, stated that the objective is that the development bank always acts in a complementary way to the private sector in supporting the necessary investments. According to him, coordinated actions will be very important so that there is no mismatch between supply and demand in the sector, since, on both sides, the necessary investments are “huge”. In this sense, BNDES will act, according to Pompeo, not only as a financing agent, but also collaborating in the structuring of projects, in the privatization of distributors and in the organization of state regulations.

“The challenge is to bring natural gas that is now being reinjected. It has to generate value throughout the chain. You have to bring this in a chain where everyone gets value, ”said Pompeo, adding that today the volume equivalent to the transport of Gasbol is reinjected in Brazilian fields.

Regarding the project to build hubs along the coast, Pompeo explained that the idea is to build structures that allow different companies to connect their producing fields to these hubs. The construction and operation of these structures and their channels for transport to the coast would be the responsibility of investors whose function would be to provide this service. With the structure operated by third parties, Pompeo recalls that the structure would naturally be allowed for use by third parties, leaving aside the need for rules for free access.

“We understand that there will be a gain in scale and make several other gas fields that could be connected to the structure viable. The expense would be much less than if each one built its gas pipeline, ”said Pompeo. “With greater competition, price could be reduced,” he added.

The BNDES study also elaborates a “positive agenda” with suggestions for improvements in the business environment; coordinated actions through articulations with public and private institutions; suggestions for structuring investments and new business models in the country, a provider of long-term financing, jointly with the private sector; and sector studies and analyzes. In addition to expanding the gas flow structure to the coast, it shows ways to increase the distribution network, expand industry and thermal power and stimulate the natural gas (CNG) market.

Source: Valor Online

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