NFE Delays Natural Gas Terminal Project, TGS, Worrying SCGás and Free Market Consumers in Santa Catarina

The Delay in the New Natural Gas Terminal Project in Santa Catarina, TGS, is Worrying SCGás and Consumers in the State, Who Believe That NFE Will Have Difficulty Finding Fuel Suppliers for the Project.

The scenario of the natural gas market in the state of Santa Catarina is increasingly concerning this Wednesday, (07/06), due to the delay by New Fortress Energy (NFE) in defining a supplier for liquefied natural gas (LNG) for the Southern Gas Terminal (TGS) in Babitonga Bay. Therefore, the distributor SCGás and other consumers believe that the delay in the project could contribute to difficulties in contracts with international companies.

TGS Natural Gas Terminal Project Delays and NFE May Encounter Difficulties Regarding Fuel Supply Contracts in the State 

NFE, in addition to delaying the terminal construction project, is also taking time to find a supplier for the natural gas for TGS and is worrying consumers of the fuel in the state of Santa Catarina. Among them is the distributor SCGás, which is now on alert regarding the project, which was previously seen as an opportunity to acquire the input in the free market, but now presents issues regarding opening through imports.

Problems have been occurring for several months, since at the signing of the contract for the project with NFE, SCGás expected to start receiving natural gas in April, but the construction work has been delayed. However, NFE continues to reaffirm its commitment to the delivery of TGS and stated that construction will be completed by the end of 2022. 

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Despite this, the issue of construction delivery is not the main concern for consumers in the state of Santa Catarina, who are now evaluating the potential impacts on the supply of natural gas in the region.

This is happening because there is a fear that inflated LNG prices in the global market may affect the attraction of import business for the product. Thus, the main concern that SCGás and other companies foresee is that NFE, after the delivery of TGS, may reduce investment plans in the Brazilian natural gas market initially. 

NFE Accelerates Investments in the European Market, Worrying SCGás and Other Consumers in the State Regarding the TGS Project

With the unstable scenario in the supply of natural gas for the TGS project, the energy director of the Federation of Industries of Santa Catarina (Fiesc), Otmar Müller, highlighted the main concerns of companies in the state: “What worries us is the supply issue, which is still doubtful. Regarding the price, we did not expect it to rise so much, but we believe that when the Ukraine war ends and the global gas supply crisis is overcome, it will fall.”

Currently, NFE is accelerating its investments in Europe and is now focusing on providing rapid regasification infrastructure solutions, eyeing the European demand for new LNG import terminals.

Thus, the doubt of SCGás and companies in Santa Catarina is about Brazil in this scenario, as the company may distance itself from commercial relations with the national territory. One of the main points leading to this concern is the issue of the sale of Centrais Elétricas de Sergipe (Celse) to Eneva, which alerted natural gas companies regarding NFE’s movement in the country. 

Finally, the company reaffirmed its commitment to the state of Santa Catarina and reinforced that it believes in the region’s potential, but it does not seem to be enough for the companies in the state, which are now on alert for the company’s next steps.