Oil Companies Target Gas Power Plant in Macaé and Form Partnership to Compete in Auction Scheduled for April 30 by the Government

BP and Eneva Join Forces in Bid for Gas Thermal Power Plant Project in Macaé; Petrobras, Engie, and Neoenergia Will Also Participate in the Auction

The government energy auction brings together oil companies like BP and Eneva in a bid for the gas thermal power plant project in Macaé. In the auction scheduled for April 30, long-term contracts will be offered for the purchase of energy from the winning plants. Brazil Produces More Oil Than the United Arab Emirates.

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Companies such as the Brazilian state-owned company Petrobras, the French Engie, and Neoenergia, controlled by the Spanish group Iberdrola, have also signed up projects to compete for the auction bids.

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In January, the state-owned Energy Research Company (EPE) reported that the April auctions received registrations for 158 projects, which would total an installed capacity of 36 gigawatts for the A-4 auction and 43 gigawatts for the A-5.

The A-4 and A-5 auctions aim to contract energy from gas and coal thermal plants to meet the demand of energy distributors, replacing supply contracts with primarily oil plants that will expire in the coming years.

The auction winners will have 15-year contracts for energy delivery starting in 2024 and 2025.

The number and volume of projects to be contracted, however, will depend on the demand from distributors, a confidential data provided by companies to the government before each public energy purchase auction.

Eneva and BP

According to the Administrative Council for Economic Defense (Cade), if successful, the British and Brazilian companies would establish a company in Brazil that would control the thermal plant, in which Eneva would have a 75% stake and BP the remaining 25%.

Scheduled to be implemented in Macaé, Rio de Janeiro, the new company would use natural gas or Liquefied Natural Gas (LNG) as fuel.

Last Friday, the competition authority approved without restrictions the purchase of a majority stake in UTE Fátima by Eneva, where the plant has the capacity to generate up to 1,750 megawatts.

The deal involves shares in the plant owned by Natural Energia, which has as partners Martins Empreendimentos, Engenharia e Participações, and Fox Energy Serviços de Energia.

Last November, Eneva had already confirmed its interest in bidding for the government’s auctions for the potential acquisition of 75% of the plant.

When contacted, BP declined to comment. Eneva stated in a note that it has an option to purchase the thermal asset and that “the matter is in progress.”

In the documents submitted to the state agency, the companies stated that the development and construction of the Fátima plant would depend on the success of the energy auctions.