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State Utilities Have Contracts to Acquire 290 Thousand m³/Day and Will Expand Demand for Biomethane in 2024.
The biomethane market has gained attention in the gas distribution sector in recent years. In 2023, several companies began to show interest in the renewable fuel, expanding opportunities for producers.
In addition to the utility that already regularly purchased biomethane, at least four distributors have signed contracts for the purchase of renewable natural gas. Copergás, the gas distributor in Pernambuco, is one of the most recent examples, having signed an amendment to the contract with Orizon VR to increase biomethane acquisition at the end of 2023.
Biomethane Acquisition Contracts Boost Renewable Gas Market
This represents less than 1% of the non-thermal demand of the utilities, but the list is likely to grow.
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Compagas, from Paraná, expects to finalize its first biomethane acquisition contract soon, while other companies, such as ES Gás (ES) and Sergás (SE), are also taking steps to acquire the product.
Distributors are not currently the primary destination for the biomethane produced in the country, with the largest share intended for end consumers (usually industries) or for internal circular economy projects – such as replacing diesel and even natural gas in vehicle fleets and production processes.
However, the state utilities are gaining ground as important anchors for enabling new biomethane projects in the country. Companies are not only looking at environmental aspects but also see renewable fuel as a means to diversify supply sources.
Next, the agency epbr provides a snapshot of the movements of the distributors that are betting on biomethane as a supply source:
Cegás (CE)
The Ceará distributor is a pioneer in injecting biomethane into the gas pipeline network. The utility has a contract with GNR Fortaleza – a partnership between Marquise Ambiental and Ecometano (MDC).
GNR Fortaleza celebrated five years of operation in 2023, with an offer of 90 thousand m³/day of biomethane – which represents about 20% of the volume distributed by Cegás. The expectation is to reach 108 thousand m³/day in the future.
Necta (SP)
The former GasBrasiliano began operations in 2023 with the first isolated system for biomethane distribution in the country. The project supplies the municipalities of Presidente Prudente, Narandiba, and Pirapozinho, in the interior of São Paulo, with renewable fuel produced by the Cocal group.
The biomethane plant at Usina Cocal has the capacity to produce up to 25 thousand m³/day, from processing sugarcane waste.
The project has become an alternative supply for these municipalities — which are 200 km away from the Bolivia-Brazil Gas Pipeline (Gasbol) and do not justify economically a conventional project for connection to Necta’s integrated network.
Copergás (PE)
The distributor from Pernambuco signed a contract with Orizon VR for biomethane acquisition in 2023. The initial agreement planned for the sale of 60 thousand m³/day, but the volume was later adjusted to up to 130 thousand m³/day.
Supply is expected to start in 2025 for a period of ten years. The fuel will be produced at the Ecoparque Jaboatão dos Guararapes, which is yet to be built.
Sulgás (RS)
The Gaúcha utility signed its first biomethane supply contract with SebigasCótica – which has partnered with the alternative investment management firm eB Capital to develop bioproducts.
The plant will be installed in the city of Triunfo and will transform waste from agrosilvopastoral activities. The initial volume for the first five years of the supply contract with Sulgás is set at 15 thousand m³/day, starting from the end of 2024.
Capacity could be increased to 30 thousand m³/day starting from the sixth year, according to contractual forecasts. The project will initially benefit the Triunfo Petrochemical Pole.
Compagas (PR)
The Paraná distributor expects to finalize this year its first biomethane contract for supply starting in 2025.
In the public call opened by the company in 2023, proposals from 12 different suppliers were submitted, with a potential volume that could exceed 380 thousand m³/day of biomethane for Paraná.
The Compagas plans to expand the share of biomethane in its portfolio to around 15% to 20% starting in 2025.
Sergas (SE)
The Sergipe utility opened a public call in 2023, for supply starting in 2026. In October, the company met with representatives from Orizon VR to begin negotiations to enable a biomethane plant at the Rosário do Catete (SE) landfill.
The expectation is to initially produce around 70 thousand m³/day, but the volume could reach 120 thousand m³/day.
ES Gás (ES)
The Espírito Santo utility signed a memorandum of understanding at the end of 2023 with Marca Ambiental for the development of a biomethane project integrated into the local gas pipeline network.
MSGás (MS)
AGEMS, the regulatory agency for Mato Grosso do Sul, published in 2023 three new regulatory norms concerning biomethane, including Portaria 257 (on Authorization for Structuring Projects for the provision of gas distribution services through local networks). In 2023, MSGás launched a public call for the purchase of renewable gas.
The utility bets on biomethane as a source for virtual pipeline projects – whether through compressed gas (CNG) or liquefied (LNG).
Naturgy (RJ/SP)
The parent company of the distributors CEG, CEG Rio, and São Paulo Sul is studying the development of distribution network projects powered 100% by biomethane. The idea is to create types of ‘green municipalities’ supplied entirely by renewable natural gas.
Comgás (SP)
The largest distributor in the country launched a public call in 2023 that received 14 proposals, two of which were for biomethane supply.
In December, the company reported that it was in ‘final negotiations with other suppliers’, in addition to Petrobras – with which Comgás signed long-term agreements.
Gasmig (MG)
The Minas Gerais distributor opened a public call in 2023 for the purchase of renewable gas for injection into the network.
Source: EPBR
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