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The Compressed Natural Gas Company CDGN Signed a Contract with Bolivian YPFB to Import Natural Gas in Brazil and Sell the Fuel in the Free Market Model in Regions Served by Gasbol.
Commercial relations between Brazil and Bolivia are becoming closer this Wednesday, (07/20), as the compressed natural gas company CDGN signed a contract with YPFB for the supply and import of fuel in the national territory. Thus, the Brazilian company aims to expand its presence in the free market of fuels and intends to sign contracts for the distribution of natural gas in regions served by the Gasbol pipeline, one of the main ones in the country.
CDGN Advances in Its Search for Presence in the Free Market of Fuels and Signs Contract with YPFB for Importing Natural Gas in Brazil
The Brazilian company CDGN, a subsidiary of the MDC group that operates in the commercialization of compressed natural gas, has just announced another significant step for its expansion in the national fuel market by signing a contract with YPFB for the import of natural gas.
The contract provides for the receipt of up to 4 million m³/day from the neighboring country and aims to establish internal commercialization in the free market model in Brazil.
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Furthermore, the agreement signed between the fuel companies will operate on an interruptible basis, meaning it can be temporarily interrupted due to issues with the natural gas supplier.
This is a very common strategy among companies that have great flexibility regarding these fuels and contributes to a closer commercial relationship. This occurs because the supplying company will not need to deal with pressure in the supply in case of a natural gas shortage, for example.
With completion expected by the end of 2023, the import contract for natural gas between CDGN and YPFB is set to serve the Southern, Southeastern, and Central-Western regions, covered by the Bolivia-Brazil Gas Pipeline (Gasbol) — which has a capacity of 30 million m³/day and operates with idleness.
Thus, CDGN and MDC expand the marketing modalities for compressed natural gas in Brazil and open doors for growth in the free market of fuels in the coming months, until the contract is finalized.
Fuel Companies Reconnect with Bolivia Seeking Closer Contracts for Importing the Resource to Brazil
YPFB continues to advance in the Brazilian fuel market in recent weeks, as the contract with CDGN is not the first to be signed with the Bolivian company. During March of this year, the foreign company closed a two-year agreement to sell up to 2.2 million m³/day on an interruptible basis to Tradener.
Additionally, the Brazilian natural gas marketing company finalized the pilot project for supplying Bolivian natural gas to Compagas, a natural gas distributor in Paraná, delivering a total daily volume of 10,000 m³/day to the natural gas distributor.
Thus, the free market for fuels in Brazil is becoming increasingly broad and flexible, with more viable opportunities for companies looking to operate in this segment.
Moreover, the closer relationships between national fuel companies operating in the free market and YPFB occur after instability in the relationship between the Bolivian company and the state-owned Petrobras, as Bolivia reduced its gas supply to the company by 30% starting in May, after committing to increase exports to Argentina by September.
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