Cegás Partners With Shell, PetroReconcavo, and Galp for Natural Gas Purchase Contracts

To Further Reduce Its Dependence on Natural Gas Supplies from Petrobras, the Ceará Company Cegás is Now Advancing Negotiations with Suppliers Shell, PetroReconcavo, and Galp in Search of Fuel Purchase Contracts

The companies Shell, PetroReconcavo, and Galp were the big winners of Cegás’s public call for future fuel contracts, the Ceará company reported on Friday, (05/27). Thus, Cegás is moving forward to establish contracts for the supply of natural gas in the state of Ceará and is approaching new suppliers to further reduce its reliance on purchasing fuel from the state-controlled Petrobras.

Shell, PetroReconcavo, and Galp Win Cegás’s Public Call for Future Contracts to Supply Natural Gas for the Supply of the Ceará State

The company Cegás opened a public call to acquire 600,000 m³/day of gas for up to four years, with June 1st being the start date for supply, and announced the winners last Friday. Thus, the companies Shell, PetroReconcavo, and Galp were the natural gas suppliers that went through the process. Only the negotiation with the company Excelarate was excluded after the Ceará distributor announced the names of the winners. 

And, after the commencement of natural gas purchases at the beginning of June, the fuel will be delivered to the Custody Transfer Stations, located in the municipalities of Fortaleza, Aquiraz, Pecém, Caucaia, Aracati, and Horizonte. The companies Galp, Shell, and PetroReconcavo began their operations as natural gas suppliers in the northeastern region of Brazil at the beginning of 2022. Thus, Cegás seeks to attract the attention of these companies to favorable new ventures for the supply of fuel in the state of Ceará over the coming years. 

Furthermore, the gas distributor in the state of Ceará had previously opened a public call seeking new natural gas suppliers for the region at the beginning of the year, but only the companies Galp and Excelarate expressed interest in the business. However, the new specifications of the public call that concluded last week were more favorable to other oil and natural gas producers in the country. With the completion of the search for suppliers, Cegás is advancing in the pursuit of a more diversified fuel supply in the state of Ceará. 

Cegás Aims to Reduce Dependence on Natural Gas Supply from Petrobras with the Opening of a Public Call for Future Contracts with Shell, PetroReconcavo, and Galp

The current situation of Cegás regarding the supply of natural gas in the state of Ceará is highly unstable, due to the overturning by the Superior Court of Justice, during March 2022, of the injunction that prevented Petrobras from raising fuel prices for the distributor. With the new scenario regarding the partnership with the state-owned company, the natural gas distributor of Ceará needed to seek new business and contracts more favorable for the purchase of the resource, primarily to avoid significantly affecting the final consumer’s budget. 

The Ceará company was in negotiations with the state-owned company and aimed for an extended term from four to nine years, in exchange for a reduction in the indexing of Brent prices from 16.75% to less than 13%. However, with the significant cut in supply from Petrobras by the Bolivian YPFB in recent days, negotiations with Cegás were suspended indefinitely. 

And, while the state-owned company does not resume negotiations with any national company, Brazilian distributors begin to look for new natural gas suppliers, just as Cegás has been doing with Shell, PetroReconcavo, and Galp, seeking greater independence in the supply of the resource.