Brazil regulator calls on operators to share natural gas infra

Brazilian operators need to develop joint solutions to produce natural gas in offshore areas, according a study by oil and gas regulator ANP.   

The watchdog suggests that firms with development projects in nearby areas (even if operated by different consortiums), should form hubs to use joint infrastructure. This could be made through the creation of specific purpose companies to operate the shared infrastructure to optimize gas transportation.  

“It is important to observe that projects that will potentially use the same transport and processing infrastructure should have coordinated evolutions and a firm investment commitment, which increases complexity,” ANP said.  

-Brazil produces 139Mm3/d (million cubic meters per day), a volume that is set to almost double to 253Mm3/d by 2029 due to large pre-salt output growth, according to federal energy planning firm EPE. 

The challenge is to find feasible solutions to bring natural gas produced on distant pre-salt fields to the coast as the current infrastructure will be fully used by 2025. The biggest obstacle is the lack of transport and processing infrastructure, such as pipelines and floating regasification units.  

“Pipeline projects are complex and involve long periods for implementation. They demand long-term financing, which limits the range of potential financiers. There is an urgent need to start promoting those projects as soon as possible to avoid bottlenecks in pre-salt natural gas flow after 2025,” the regulator said.    

Today, high volumes are re-injected into the reservoirs due to the lack of economic solutions. In 2020, the forecast is that 42Mm3/d of natural gas will be re-injected, a volume that can grow to 60Mm3/d by 2023, according to ANP. 

ANP said the choice between re-injection and taking the natural gas to the market will need to be made individually for each project, considering technical, economic and social aspects.   

EPE projections show that by 2029 Brazil’s gas consumption will reach 87.6Mm3/d, a volume that is 10Mm3/d higher than the demand registered last year. Consumption could become even bigger if current efforts to open up the natural gas downstream and midstream sectors to private players, through the Novo Mercado de Gás (new gas market) program and state-run Petrobras’ assets sales, are successful.   

“The stronger natural gas usage in the national territory has the characteristic of leveraging the use of a cleaner fuel compared to other fossil fuels, as well as contributing to the development of new businesses,” ANP said.   

In January, the volume of natural gas available in the Brazilian market reached 102Mm3/d, out of which 68Mm3/d came from national onshore and offshore production, another 29Mm3/d was imported from Bolivia and 5Mm3/d came from LNG imports. A recent study by Rustad Energy showed that the country could become self-sufficient before 2030.