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New Legal Framework for the Natural Gas Industry Has Been Approved and New Investments Are on the Way
The federation of industries of Rio de Janeiro (Firjan) estimates that Brazil is expected to receive more than R$ 88 billion in investments after the approval of the new legal framework for the natural gas sector was completed at the Chamber of Deputies in the early hours of this Wednesday, after years of waiting. The new legal framework was approved without the hundreds of amendments proposed by the Federal Senate and now depends only on presidential sanction. Among other measures, the law allows natural gas pipelines to be constructed with authorization rather than concession, which streamlines the process.
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Firjan Highlights the Importance of Approval
“Now, the legal framework goes to presidential sanction, which should happen quickly, allowing the execution of projects of great relevance to the country to expand. With the regulatory improvements in the new legislation, the volume of investments is expected to increase in natural gas market activities up to final consumption in industrial plants,” stated Firjan.
According to a company study, the potential for demand expansion in the state of Rio de Janeiro, which should materialize with the new business environment, could lead to an increase in demand of up to 13 million cubic meters per day (m3/day), with the resumption of industrial activity, the implementation of CNG projects for heavy vehicles, and prospects for new industrial plants.
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Approval of the New Legal Framework for Natural Gas
The project for the new legal framework was approved by the Chamber of Deputies in the form of a substitute from the Mining and Energy Committee, authored by Deputy Silas Câmara, with a favorable opinion from Laercio Oliveira.
For Laercio Oliveira, the proposal has the capacity to transform a market that has been monopolized for many years. He celebrated, saying: “Today we deliver to the country a project of modern investments that will promote competition.”
However, the opposition obstructed the proceedings during the vote, disagreeing with the results promised by the government’s investments with the new legal framework.
“The goal of this project is to facilitate the privatization and import of natural gas, while Brazil is one of the world’s largest producers of gas from the pre-salt and reinjected into oil wells,” said Deputy Carlos Zarattini.
Experts Explain Why Investments in the Natural Gas Market Are Good for Brazil
Natural gas is of paramount importance for the economy and also for the environment. Starting with its quality and ability to replace any petroleum-derived fuel, such as coal, diesel, oil, and alcohol, it is also used for fertilizers and in the production of urea and ammonia.
In terms of the environment, the use of gas prevents deforestation in Brazilian territory and reduces the impacts caused to nature and, if produced sustainably, also decreases pollutant emissions. Natural gas has the potential to meet the growing global demand for fuel.
With advancements in technology, companies have made investments in centrifugation equipment to clean fuel known as Turbo Trays. This product has the capacity to increase gas production by 80%.
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