Government approved Natural Gas Market Competition Committee in Brazil

The National Council for Energy Policy (CNPE) announced the approval of the Resolution establishing the Committee for the Promotion of Competition in the Natural Gas Market in Brazil.

Last Tuesday, April 09, the National Council for Energy Policy approved the resolution that creates the Committee for the Promotion of Competition in the Natural Gas Market in Brazil. The Novo Mercado do Gás, name given by the government to the former Gás para Crescer, intends to promote the opening of the market to guarantee free access to the existing gas pipeline network in the country, which has 60% idle capacity, according to the Ministry of Mines and Energy.

The “New Gas Market” is a program coordinated by the Ministry of Mines and Energy, developed jointly with the Ministry of Economy, the National Agency of Petroleum, Natural Gas and Biofuels (ANP), the Administrative Council for Economic Defense (CADE) and the Energy Research Company (EPE) for the formation of an open, dynamic and competitive natural gas market.

The expected results of the program are: the use of gas from the Pre-Salt fields (Campos and Santos basins), from the Sergipe and Alagoas Basins and from other relevant discoveries; new investments in natural gas flow, processing and transport infrastructure; increase in gas thermoelectric generation with a reduction in energy prices; and reindustrialization of the cellulose, ceramics, fertilizers, petrochemicals, steel, glass sectors, among others.

The Novo Mercado de Gás is based on four pillars, namely, the promotion of competition, harmonization and improvement of distribution regulation, integration with the electricity sector and with the industrial sector and elimination of tax barriers.

The Committee constituted within the scope of the CNPE, which will have a period of up to sixty days to conclude its activities, will contribute to the acceleration of the transition to the new market and will have competences to:

I. Propose measures to encourage competition in the natural gas market;

II. Forward to the CNPE recommendations for guidelines and improvement of energy policies aimed at promoting free competition in the natural gas market;

The decision is in line with what the Minister of Economy, Paulo Guedes, has been saying, in the search for a reduction in the price of energy to boost the industry. He has claimed that the government wants a cheap energy shock, to reduce the cost by 50 percent.

onerous assignment

The CNPE also approved the draft of the Amendment resulting from the agreement with Petrobras on the revision of the onerous assignment contract. The agreement that will allow the auction of the volume exceeding the 5 million barrels of oil provided for in the contract involves reimbursement to the state-owned company of US$ 9,058 billion. The event is scheduled for October 28th.

“The high availability of surplus volumes of oil and natural gas in the Assignment of Rights area and the high productivity of the pre-salt fields have aroused great interest from the main oil companies in the world, in addition to placing the country among the five largest oil producers. of the world”, informed the MME

The renegotiation of the Assignment of Rights contract had been dragging on since 2013. The CNPE will meet again on April 17th to deal with the details of the sale. The government expects to raise at least R$ 100 billion in the event.

Grupo Libra must cut 50% of its employees and close boarding operations on the 28th.