Page 4 - LatAmOil Week 45

LatAmOil COMMENTARY LatAmOil

The GNA JV aims to import LNG for a gas-to-power project (Photo: GNA)

Thinking ahead

Brazil’s latest gas reform bill anticipates the need to liberalise access to pipelines,

LNG terminals and other infrastructure ahead of the recovery in energy demand

ON September 1, members of the Chamber of anti-vertical integration provisions will prevent
Deputies, the lower house of Brazil’s parliament, companies from gaining monopoly control over
WHAT: voted to approve a bill designed to expand the any part of the market.
A bill expanding the scope of the government reform programme for
gas reform programme the natural gas sector. A good time for reform
recently passed in the The legislation builds on the “New Gas Mar- Laercio Oliveira, the legislator who presented
lower house of Brazil’s ket” policy, the package of reforms that was the measure in the Chamber of Deputies, told
Parliament. rolled out in April 2019. It aims to advance the Reuters in late August that he expected the bill
liberalisation of Brazil’s domestic gas market to help bring domestic gas prices down. “We
WHY: by altering the legal framework governing dis- have the most expensive gas in the world, which
The proposed reforms tribution operations. More specifically, it seeks forced hundreds of industries to shut down in
will improve conditions to replace the current regime, under which the Brazil or change their source of energy,” said
in the domestic market government awards concessions to would-be Oliveira, who represents the state of Sergipe.
before the resurgence of distributors, with one that makes the National The bill has not taken effect, as it has yet to
electricity demand.
Agency of Petroleum, Natural Gas and Biofuels pass through the Federal Senate, the upper
WHAT NEXT: (ANP) responsible for granting authorisations house of parliament, and secure the signature
The bill is slated to be to applicants. Additionally, it bars gas produc- of President Jair Bolsonaro. (It is due to be dis-
submitted to the upper ers from participating in the gas distribution cussed in the Senate soon.)
house in the near future. business. Even so, the timing of the measure is good.
Officials in Brasília believe that the bill will Brazil’s parliament and president would do well
promote competition in the distribution sec- to adopt these additional reforms soon, before
tor by clearing some of the bureaucratic obsta- the country’s energy demand recovers from
cles facing companies that are seeking to build the impact of the coronavirus (COVID-19)
new gas pipelines. They also hope that the pandemic.

P4 www. NEWSBASE .com Week 45 12•November•2020