Analysis

Brazil tackling offshore gas bottlenecks

Bnamericas Published: Monday, September 21, 2020
Brazil tackling offshore gas bottlenecks

Brazil’s Petrobras is enhancing its pipeline and processing capacity of offshore natural gas, while the federal government studies alternatives for tackling what is one of the country’s main bottlenecks to spark fuel consumption.  

The state oil company will receive this week bids for the adaptation of its Caraguatatuba natural gas treatment unit (UTGCA) in São Paulo state. The project aims to enable it to process up to 10Mm3/d (million cubic meters a day) of Santos basin pre-salt gas without the need to mix it with post-salt gas, Petrobras said in a press release. 

Another key investment of the company is the Rota 3 gas pipeline that will connect pre-salt fields to a new natural gas processing unit (NGPU) being built in Itaboraí, Rio de Janeiro state. Scheduled to begin operations in 2021, the 355km pipeline will have capacity of 18Mm3/d of gas, while the NGPU will be able to process 21Mm3/d. 

Currently, Brazil has two pipelines taking pre-salt gas onshore: Rota 1, with capacity of 10Mm3/d and connecting to the UTGCA, and Rota 2, with up to 16Mm3/d and connecting to the Cabiúnas terminal (Tecab) in Macaé, also in Rio state. The processing capacities of the two units are 10Mm3/d and 13Mm3/d, respectively. 

The three Petrobras pipelines are also used by companies like Shell, Petrogal (Galp) and Repsol Sinopec, which hold interests in the Lula and Sapinhoá pre-salt fields, among others. 

Infrastructure bottlenecks

The Brazilian government envisages that full capacity of the ducts will be achieved by 2025. From that year, it would be necessary to deploy new gas pipelines in the Santos and Campos basins to increase transport of pre-salt natural gas to shore for export. 

Federal energy research firm EPE has, so far, mapped 11 indicative projects of gas pipelines connected to NGPUs, seven of them based on pre-salt volumes and another four based on post-salt volumes. The pipelines are about 2,100km long, and some of them offer options to transport gas from the same sedimentary basins (Santos, Campos, Espírito Santo-Mucuri and Sergipe-Alagoas).

Considering the construction of only one alternative for each basin, the projects could add more than 77Mm3/d of export capacity from offshore areas, in addition to NGPUs with total processing capacity of over 70Mm3/d. 

Brazil's Cosan has presented to environmental regulator Ibama projects for two of the possible offshore gas pipelines considered by EPE. The 270km long Rota 4 is planned to connect the BM-S-8 block, in Santos basin, to a new natural gas treatment unit in Cubatão, São Paulo, while its 231km Rota 4b pipeline would link the same block to Itaguaí port, in Rio de Janeiro. 

Financing

Given the complexity of structuring and funding such projects, federal development bank BNDES has proposed a new business model through a specific purpose company, which would be responsible for the operation of shared gas transportation infrastructure. Oil and gas operators would connect their production fields to an offshore hub and from there a gas pipeline with capacity to transport production from several fields would connect to an onshore NGPU. 

Gas reinjection 

According to oil and gas regulator ANP, some 24% of Brazil’s total natural gas output in 2019 was reinjected. The country’s main producer, Petrobras, claims that the reinjection is a “noble” form of using the gas produced in its offshore fields, since the technique is important for increasing the oil recovery factor. However, local specialists say the transport and processing infrastructure bottleneck is one of the main reasons why the monetization of offshore gas in the country remains challenging.

To continue reading, subscribe to BNamericas to get all the information in this article and access to related news items and reports.

Subscribe to BNamericas and gain access to thousands of project profiles, key contacts and news.

Other projects in: Oil & Gas

Get critical information about thousands of Oil & Gas projects in Latin America: what stages they're in, capex, related companies, contacts and more.

Other companies in: Oil & Gas

Get critical information about thousands of Oil & Gas companies in Latin America: their projects, contacts, shareholders, related news and more.

  • Company: Sociedad Nacional de Oleoductos S.A.  (SONACOL)
  • Santiago-based Sociedad Nacional de Oleoductos S.A. (Sonacol), is engaged in the distribution of LPG, diesel, gasoline and kerosene for the aviation industry through a pipeline ...
  • Company: Empresas Copec S.A.  (Empresas Copec)
  • Empresas Copec S.A. is a Chilean industrial holding company organized into two business areas: energy – including liquid fuel distribution, electric power generation, liquefied ...
  • Company: Genneia S.A.  (Genneia)
  • Genneia, anteriormente Emgasud, es una firma argentina que se dedica a la distribución y transporte de gas natural, generación eléctrica y construcción de gasoductos. También el...
  • Company: Mover Participações S.A.  (Mover)
  • Mover Participações S.A., formerly Camargo Corrêa S.A., founded in 1939 as the construction firm Camargo, Corrêa & Cia. Ltda. – Engenheiros e Construtores, is a Brazilian holdin...
  • Company: Parker Drilling Co.  (Parker)
  • Parker Drilling Co. is a Houston-based company that provides worldwide drilling services of oil, natural gas, and geothermal wells with both company-owned and customer-owned rig...