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Making Its Debut as a Natural Gas Supplier in the National Market, 3R Petroleum Closed a Contract with Bahiagás and Will Invest in Production in the Recôncavo Basin to Supply Fuel for the Bahia Company
3R Petroleum revealed last Friday (05/27) its latest business in the Brazilian oil and gas sector, a natural gas supply contract for Bahiagás. Thus, the company will debut as a supplier of the fuel in the Brazilian territory and will utilize its production in the Recôncavo Basin for the partnership, which will be the company’s entry point into the supply of these resources in Brazil.
Bahiagás Will Now Receive Natural Gas from 3R Petroleum, Produced in the Recôncavo Basin with New Investments to Expand Fuel Exploration
In a statement released this Friday, oil and gas company 3R Petroleum announced that it will now be the natural gas supplier for Bahiagás and will be responsible for supplying a large portion of the fuel in Bahia territory.
With the signing of the contract, the company begins its business in the fuel supply sector in Brazil and expects to open doors for new ventures with other natural gas distributors in the national territory. Thus, 3R Petroleum will act as a supplier for Bahiagás with a price between US$ 6 and US$ 7 per million BTU, for a Brent reference between US$ 75 and US$ 125.
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Additionally, the company also announced that the contract for the supply of fuel produced in the Recôncavo Basin is set to expire in 2023 but may be extended if it is of interest to both parties. Thus, it hopes to continue the partnership with Bahiagás for the supply of natural gas over the coming years, expanding its role as a supplier.
Moreover, the agreement between Bahiagás and 3R Petroleum foresees an initial sale of 95 thousand m³/day, and also stipulates that the volume of natural gas should gradually increase to 205 thousand m³/day in December. Finally, it was announced that the selling price of the molecule will consist of a fixed component of US$ 4.50 per million BTU and a component indexed to the price of Brent up to US$ 2.5 per million BTU, to ensure a beneficial negotiation for both companies.
Contract for Natural Gas Supply Represents New Market for the Company and a Diversification Strategy for the Fuel for Bahiagás
The entire contract closing was done with the benefit of both companies in mind, and Bahiagás is looking for domestic fuel producers, like 3R Petroleum, which has a strong natural gas exploration in the Recôncavo Basin. Furthermore, in addition to this contract, the Bahia distributor also currently has contracts with Alvopetro, Eagle, PetroReconcavo, and Origem Energia, proving its strategy of diversifying its fuel supply chain over the coming years.
Bahiagás is increasingly invested in diversifying its fuel purchases, especially after price increases by Petrobras. It is now on the lookout for new suppliers. Meanwhile, 3R Petroleum saw the venture as an opportunity to debut as a natural gas supplier and open new horizons within the national oil and gas market.
Thus, the company emphasized in an official statement that “The commercial partnership between 3R and Bahiagás is aligned with the company’s strategy to continually evaluate alternatives for better monetization of its production and for customer diversification, in order to generate value for shareholders,” reinforcing its pursuit of expansion in the Brazilian market.
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