Page 10 - GLNG Week 46

GLNG COMMENTARY GLNG

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past to offset some of this gap by importing gas commitment to reform – as outlined in the orig-
by pipeline from neighbouring Bolivia. How- inal “New Gas Market” policy and as elaborated
ever, this option has become less attractive as in the bill discussed above – will be important.
global gas prices have come down. Petrobras It will help ensure that independent suppliers
has therefore reduced the volumes of gas it buys have access to the terminals needed to import
from Bolivia and has turned instead to imported LNG and to the trunk pipelines that will con-
LNG, which has grown much cheaper as a result nect these terminals to regional markets. This, in
of rising production in the US and elsewhere. turn, will help ensure that local distributors have
more options for securing the gas they need to
LNG and power generation deliver to end-users. (Under current Brazilian
As a result, Brazilian demand for LNG is on law, distribution is under the control of state
the rise. And according to a note from Rystad governments. The bill that was discussed in the
Energy, this rise is set to continue, especially as Chamber of Deputies in September allows each
domestic electricity consumption climbs and state to make its own decision as to whether to
gas-to-power projects move forward. “Brazil is preserve this monopoly or open local markets
set to be at the centre of LNG demand in Latin up to third parties to some extent.)
America over the next few years, as the country These policies will allow the country to
expects natural gas to play a greater role in power make the most of the gas infrastructure and These policies
generation,” the Norwegian consultancy said. assets it already has, according to Lisa Vis-
Décio Oddone, the former ANP chief who cidi, the director of the Energy, Climate will allow the
now serves as CEO of privately owned Enauta, Change & Extractive Industries Programme country to make
also expects LNG to play a more pivotal role in at Inter-American Dialogue (IAD). “The pol-
the Brazilian energy industry. “So Bolivian gas, icy is expected to lead to more efficient use of the most of the
pre-salt gas, onshore gas, they will all compete existing infrastructure, lower natural prices for
with LNG,” he said at an online industry semi- end-users and growth in natural gas demand in gas infrastructure
nar in late October. Brazil,” she told NewsBase. “The reform aims to
Likewise, Gustavo Labanca, CEO of Trans- expand the number of players in the gas sup- and assets it
portadora Associada de Gás (TAG), one of the ply market to generate competition and allow already has.
country’s largest regional gas transport opera- access to infrastructure so those new suppliers
tors, believes that the power-generating sec- can reach consumers.”
tor will help drive demand for LNG. “One of Additionally, it has the potential to help make
the anchors for new gas investments in Brazil gas more widely available. As Henrique Anjos, a
[is] the gas-fired [thermal power] plants. The gas and research analyst with Wood Mackenzie,
Brazilian power market needs flexibility, and explained to NewsBase: “The new law under dis-
LNG brings this flexibility,” he said at the same cussion changes the pipeline regime from con-
seminar. cession to authorisation. This is considered as an
important step for new investment in transport
Support from the new legislation infrastructure, which can support natural gas to
Under these conditions, the government’s reach remote areas in Brazil.”™

P10 www. NEWSBASE .com Week 46 20•November•2020