The delay in the project for the new natural gas terminal in Santa Catarina, the TGS, has been worrying the distributor SCGás and consumers in the state, who believe that NFE will have difficulties in finding fuel suppliers for the project.
The scenario of the natural gas market in the state of Santa Catarina is increasingly worrying this Wednesday, (06/07), due to the delay from New Fortress Energy (NFE) to define a liquefied natural gas (LNG) supplier for the Southern Gas Terminal (TGS) in Babitonga Bay. Thus, 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
The NFE, in addition to delaying the terminal works project, is also taking a long time to find a supplier for the natural gas from the TGS and has been worrying fuel consumers in the state of Santa Catarina. Among them is the distributor SCGás, which is now in a state of alert regarding the project, which was previously seen as an opportunity to acquire the input on the free market, but which now presents problems regarding opening via importation.
The problems have been happening for some months now, since, when signing the contract for the project with NFE, SCGás expected to already be supplied with natural gas during the month of April, but the works ended up being delayed. However, NFE continues to reaffirm its commitment to the delivery of the TGS and said that, by the end of 2022, the works will be completed.
Despite this, the problem of delivering the works is not the main concern of consumers in the state of Santa Catarina, who are now analyzing the possible impacts on the supply of natural gas in the region.
This happens because there is a fear that inflated LNG prices in the global market could affect the attraction of importing the product. Thus, the main problem that SCGás and other companies are foreseeing is that the NFE, after the delivery of the TGS, will reduce the investment plans in the Brazilian natural gas market at first.
NFE accelerates investments in the European market and concerns SCGás and other consumers in the state regarding the TGS project
With all the unstable scenario in the natural gas supply of the TGS project, the energy director of the Federation of Industries of Santa Catarina (Fiesc), Otmar Müller, highlighted the main fears of companies in the state: “What worries us is the issue supply, which is still in doubt. As for the price, we did not expect it to rise so much, but we believe that when the war in Ukraine ends and the crisis in the world's gas supply is overcome, it will fall”.
Currently, NFE is accelerating its investments in Europe and is now focusing on providing rapid regasification infrastructure solutions, with an eye on European demand for new LNG import terminals.
Thus, SCGás and companies from Santa Catarina are in doubt about Brazil in this scenario, since the company may move away from commercial relations with the national territory. And one of the main points that lead to this concern is the issue of sale from Centrais Elétricas de Sergipe (Celse), to Eneva, which warned natural gas companies about the movement of NFE 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 companies in the state, which are now in a state of alert for the company's next steps.
