Petrobras is forced to leave the Brazil-Bolivia gas pipeline

The agreement should lead to a reduction in Brazilian gas imports by at least 10 million m3 per day.

Petrobras' agreement with Cade (Administrative Council for Economic Defense), which will be evaluated by the collegiate on July 08, determines that the state-owned company will have to sell its stake in the gas transport and distribution companies and get rid of control of the Brazil-Bolivia gas pipeline.

If the state-owned company is interested in making the purchase, as a consumer after it lost control of the gas pipeline, Petrobras may keep up to 50% of the available gas.

The draft of the agreement also obliges Petrobras to sell 10% of the remaining stake in NTS (Nova Transportadora do Sudeste) and TAG (Transportadora Associada de Gás), in addition to having to sell its stake in state distributors.

The agreement between the oil company and Cade is the reason for opening up the gas market. The government estimates that this deal will attract investments of up to BRL 32,8 billion in new gas pipelines and terminals by 2032 and reduce prices by up to 40% to stimulate industry and boost economic growth.

For Paulo Guedes, Minister of Economy, the expectation is that this plan will also generate R$ 2 billion in royalties and R$ 5,3 billion in ICMS per year in the states of Rio de Janeiro, São Paulo, Espírito Santo and Sergipe.

The purchase and sale contracts must be signed by the end of 2020. In the case of the gas pipeline, Petrobras will have to define the price together with the ANP (National Petroleum Agency) by March of the same year.

The outcome of the sale process of all assets should occur at the end of 2021. It can be extended for another year, if the state-owned company requests it and Cade approves it.

The Brazil-Bolivia gas pipeline is the country's main gas transportation channel. It crosses Mato Grosso do Sul, São Paulo, Paraná, Santa Catarina and Rio Grande do Sul, passing through 136 cities.

30 million m3 of gas pass through it daily, delivered to seven local distributors. The pipeline also supplies thermoelectric plants and refineries directly along its route.

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