BP and Eneva unite in bidding dispute for gas thermoelectric project in Macaé; Petrobras, Engie and Neoenergia will also participate in the auction

Government energy auction, unites oil companies like BP and Eneva in bidding dispute for gas thermoelectric 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 UAE.

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Companies such as the Brazilian state-owned company Petrobras, the French company Engie and Neoenergia, controlled by the Spanish group Iberdrola, also entered projects to compete in the auctions.

In January, the state-owned Energy Research Company (EPE) informed that the April auctions received the registration of 158 projects, which would add a total installed capacity of 36 gigawatts for the A-4 event and 43 gigawatts for the A-5.

The A-4 and A-5 auctions are aimed at contracting energy from gas and coal thermoelectric plants to meet the demand of energy distributors, replacing supply contracts with mainly oil-fired plants that will expire in the coming years.

The auction winners will have 15-year contracts to deliver energy from 2024 and 2025.

The number and volume of undertakings to be contracted, however, will depend on the demand from the distributors, confidential data presented by the companies to the government before each public tender for the purchase of energy.

Eneva and BP

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

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

Last Friday, the purchase of a majority share of UTE Fátima by Eneva, where the plant has the capacity to generate up to 1.750 megawatts, was approved without restrictions by the antitrust agency.

The deal involves shares in the plant belonging to Natural Energia, which is partnered by Martins Empreendimentos, Engenharia e Participações and Fox Energy Serviços de Energia.

In November of last year, Eneva had already confirmed its interest in competing in government bids for the potential acquisition of 75% of the plant.

When contacted, BP declined to comment. Eneva said in a note that it has an option to purchase the thermoelectric asset and that "the matter is ongoing".

In the documents delivered to the state agency, the companies said that the development and construction of the Fatima plant will depend on success in the energy auctions.