Page 7 - GLNG Week 50 2021

GLNG COMMENTARY GLNG

Excelerate negotiated a lease contract for postpone the implementation of certain pro-
the Bahia LNG terminal, which Petrobras visions in light of tight supply conditions on
has described as “an island-type pier with all domestic gas markets.
the necessary facilities for mooring a FSRU
(floating storage and regasification unit) ship New supply deals
directly to the pier and a supply ship on the Even so, new supply deals point to rising imports
port side of the FSRU.” The lease also covers in the future, as various buyers seek to decarbon-
assets associated with the terminal – a 45-km ise their energy supplies. For example, New For-
pipeline that runs from terminal facilities in tress Energy (NFE) announced on December 13
the port of Bahia to exit points in São Fran- that it had executed a 15-year gas supply agree-
cisco do Conde and São Sebastião do Passé, ment (GSA) with a Norsk Hydro subsidiary to
along with the power-generating facilities supply the Alunorte alumina refinery in Pará.
in the Madre de Deus Waterway Terminal The deal covers the supply of gas from NFE’s
(TEMADRE). Barcarena LNG regasification terminal, which is
currently under construction and also located in
Strong domestic gas demand Pará. NFE has agreed to supply Hydro with 1mn
Bahia is just one of Brazil’s five LNG import ter- gallons (3,785 cubic metres) per day of LNG.
minals; the others are Pecem, Porto de Sergipe, While the deal is comparatively small in scale,
Gas Natural Açu (GNA) and Guanabara. Mean- it will allow the refinery to switch from petrole- New supply deals
while, another three are under construction and um-based fuels to natural gas. The conversion is
anticipated to start up by 2025. anticipated to reduce the refinery’s annual car- point to rising
This increase in regasification capacity is a bon dioxide (CO2) emissions by an estimated imports in the
positive development, given that Brazilian gas 700,000 tonnes per year (tpy) as Hydro works to
demand is very strong. However, it will take sev- cut its global greenhouse gas (GHG) emissions future, as various
eral years to bring the new terminals on stream. by 30% by 2030.
As such, the fact that Excelerate has begun tak- “Supply of natural gas from NFE’s Barcarena buyers seek to
ing delivery of LNG at Bahia, which has been LNG terminal will support Hydro in shifting
operating under capacity for some time, is good Alunorte to cleaner fuels and will significantly decarbonise their
news. Brazil is looking to buy more gas in the advance Brazil’s energy transition,” stated Wes energy supplies.
short term, as well as the long term, as it has Edens, NFE’s chairman and CEO.
been importing record levels of LNG to com- The Barcarena terminal is due to be com-
pensate for reduced hydropower production in pleted in 2022 and is currently set to be the sole
the midst of a drought. point of LNG shipments to Pará and Brazil’s
Meanwhile, the boom in LNG imports is other northern states more broadly. NFE aims
set to gain even more momentum as a conse- to support industrial development in the region,
quence of market reforms and the enactment of which contains the Brazilian portion of the
a new natural gas law that ended state-owned environmentally sensitive Amazon River basin,
Petrobras’ monopoly earlier this year. But it will while also reducing emissions and pollution. It
take time for the full impact of these reforms to hopes to achieve the latter target by offering a
become clear, as CADE agreed last month to cleaner alternative to petroleum products.™

Week 50 17•December•2021 www. NEWSBASE .com P7