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Petrobras announced that it intends to start operations at its delayed GasLub natural gas processing plant in early 2024

Written by Bruno Teles
Published 08/03/2023 às 14:01
GasLub
GasLub (photo/disclosure)

GasLub Project: With the addition of an initial supply of 9 million m³/d of natural gas to the domestic market, the company intends to double the amount of gas available to the market in the next five years.

However, the complete operation of the GasLub project, including the 3 km route 355 pipeline that will transport gas from the pre-salt offshore fields for the processing facility, there were contractor changes that delayed the project. According to Petrobras' head of exploration and production, Fernando Borges, the pipeline will start operating from April 2023.

Although the Petrobras announcement, consumer groups and politicians in Brazil have been critical of the amount of gas that oil companies re-inject to stimulate oil production. They claim this leads to more expensive gas supplies and the need for pipeline and LNG imports. According to the Ministry of Mines and Energy, reinjections increased to 68 million m³/d in 2022, while gas supplies to the domestic market dropped to 47 million m³/d.

Borges, one of the main Petrobras executives, defended the practice of gas reinjection in the oil industry, stating that, of the approximately 70 million m³/d that were reinjected in 2022, only a small part would make sense to sell. The executive explained that the first 40% of the gas has a high CO2 content and is more suitable to be reinjected into Petrobras' offshore pre-salt fields. The second 40%, in turn, have better specifications for domestic use and are essential to maintain pre-salt production.

According to Borges, Brazil will still depend on gas imports, including in the LNG format, for many years. LNG imports have grown in recent years, reaching a record 26 million m³/d in 2021, before falling to 7 million m³/d by November 2022, according to government data. Despite this, Borges also pointed out that there is a proposal to tax the gas that is being reinjected, which has generated debates in the country. The press has suggested that the country should stop reinjecting the gas and start selling it on the domestic market, now that the sector is booming.

In addition, Borges stated that another 10% of the gas comes from the Urugua oil field, in the Amazon region, which currently does not have an easy market and is being used mainly to recover condensate. Meanwhile, two private sector LNG terminals continue to import the gas to supply power generators in off-grid areas. The executive pointed out that, despite the discussions surrounding the tax on reinjected gas, reinjection is still fundamental to the production process in the oil industry.

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Bruno Teles

I talk about technology, innovation, oil and gas. I update daily about opportunities in the Brazilian market. Agenda suggestion? Send it to brunotelesredator@gmail.com

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