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The Company Is Considering Making New Investments in the Area While Seeking Better Terms in Contracts with 3R.
This edition of the newsletter brings the latest news about the Pipeline PetroReconcavo, which is expanding its operations to process gas and plans new investments in this area. In addition, New Fortress secured financing for a thermal power plant in Pará and acquired a regasification vessel for an LNG terminal in Santa Catarina. Compass is interested in acquiring control of Compagas and SCGás, and also purchased biomethane from São Martinho. Meanwhile, Arsesp is proposing to relax market concentration limits in São Paulo. Stay informed about these and other news in the energy sector.
A New Phase for PetroReconcavo
PetroReconcavo is preparing to begin operations at its new Gas Treatment Unit (UTG) in São Roque, Bahia, by the end of this year. Currently, all of the company’s natural gas production is processed at third-party facilities, but now it is building its own infrastructure.
The company is also considering new processing investments, both in Bahia and Rio Grande do Norte, while exploring partnerships with the owners of existing infrastructure.
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This year has been marked by more changes in the onshore gas processing infrastructure of the Northeast. 3R Petroleum acquired the Potiguar Pole from Petrobras, becoming the most recent private operator of the UPGN in Guamaré. Meanwhile, the state-owned company decided not to sell the Bahia Terra Pole but is open to partnerships.
The company Origem Energia is planning to expand the Gas Processing Unit (UPGN) in Pilar, located in Alagoas. Meanwhile, PetroReconcavo is seeking to strengthen its presence in this sector.
The new design of the gas processing in the Northeast is highlighted at gas week, with significant changes that promise to impact the regional market.
PetroReconcavo intends to start operations at the Gas Treatment Unit São Roque by the end of the year. This unit, located in Bahia, will be responsible for processing natural gas from the Mata de São João, Remanso, Jacuípe, and Riacho de São Pedro fields, through a simplified treatment unit.
The capacity of the Natural Gas Processing Unit (UTG) is 400 thousand m³/day, allowing PetroReconcavo to deliver gas directly into the Bahia gas grid without needing to use the network of the Transportadora Associada de Gás (TAG).
With this new asset, PetroReconcavo will reduce its dependence on the UTG in Catu, owned by Petrobras, which will result in reduced processing costs and possible operational constraints. The independent oil company had attempted to buy the Bahia Terra Pole in partnership with Eneva, but Petrobras, under Jean Paul Prates’ management, ended up withdrawing from the deal.
PetroReconcavo Bets on Margin Gains with New Infrastructure
PetroReconcavo is now utilizing its own infrastructure, which includes a bypass in the natural gas transport system. This means a direct connection between the supply source (the UTG) and the Bahia gas distribution network. According to the Director of Commercialization and New Business, João Vitor Moreira, this new infrastructure reduces transport costs, positively impacting the final price of natural gas and providing a better profit margin for the company. This strategy was discussed during a teleconference held on 11/10 with analysts and investors to present the financial results for the 3rd quarter.
The company’s CEO, Marcelo Magalhães, recently announced that PetroReconcavo is in advanced stages of preparing a project for a complementary Natural Gas Processing Unit (UPGN) in Bahia. This unit will have the capacity to process condensates and produce Liquefied Petroleum Gas (GLP), making it more complete and efficient.
Moreover, the company is considering investments in processing in the state of Rio Grande do Norte, aiming to negotiate access conditions to the existing infrastructure in Guamaré.
By acquiring the asset, 3R Petroleum also obtained the existing contract between PetroReconcavo and Petrobras for processing. PetroReconcavo is looking for ways to reduce costs associated with this contract, which lasts until mid-2024. The company is considering the possibility of becoming a partner of 3R in the operation of the asset, but if that option does not materialize, it is weighing investing in its own infrastructure. PetroReconcavo bases its business model on the UTG São Roque and believes that building its own infrastructure would be a quick return investment.
Moreira stated that both paths, building a unit of its own or acquiring a stake in UPGN Guamaré, are being evaluated with great care.
Collaboration Is the Best Option, Highlights Marcelo Magalhães
Marcelo Magalhães emphasized that partnership is the most advantageous alternative, as he believes that the operations of 3R and PetroReconcavo in the Potiguar Basin have natural synergies and that collaboration has the potential to create value for both parties, while lack of collaboration can result in loss of value for the shareholders of both.
3R has shown interest in establishing partnerships in the Industrial Asset of Guamaré, which goes beyond the UPGN and also includes the Clara Camarão Refinery and the infrastructure for derivative storage. Regarding interest in a possible partnership in UPGN, the CEO of the company, Matheus Dias, mentioned in a teleconference on November 9, that the company is satisfied with its current portfolio and its position as a processing service provider, but did not rule out the possibility of a future partnership.
The company is satisfied with its current portfolio and emphasizes the efficiency of its services at UPGN. However, it is open to exploring transaction opportunities that may bring value to the company, always prioritizing careful analysis.
3R is investing in expanding its processing capacity in Guamaré, increasing from 1.4 million m3/day to 1.8 million m3/day.
The current administration of Petrobras decided to alter the asset sale program, opting not to sell the Bahia Terra Pole. Instead, the company is open to partnerships to operate its exploration and production assets, aiming to share investments.
This strategic change was justified by Petrobras in September, with the intention of maximizing portfolio value, focusing on profitable assets, replenishing oil and gas reserves, and exploring new frontiers. Additionally, the company seeks to increase the supply of natural gas and promote the decarbonization of its operations.
New Partnerships and Investments in Natural Gas in Brazil
In a statement made last Friday (11/10), Ana Paula Zettel, executive manager of upstream partnerships and procedures at Petrobras, mentioned the possibility of establishing new investments and partnerships to strengthen the company’s onshore assets. She also commented on the plans for the Gás-Sul Terminal, which is closer to starting its operations. An agreement was made between Petrobras and New Fortress Energy to enable the start of terminal operations in Baía da Babitonga from 2024, with the sub-chartering of the regasification vessel Energos Winter for Santa Catarina.
NFE recently secured financing from BNDES in the amount of R$ 1.8 billion to make the construction of the gas thermal power plant Novo Tempo Barcarena, with 624 MW, in Pará feasible.
The president of Cosan, Rubens Ometto, revealed to CNN that the company has shown interest in acquiring control of the distributors Compagas and SCGás. In Paraná, Copel is already preparing to sell Compagas, while in Santa Catarina, Celesc has yet to announce its plans regarding the local concessionaire.
TAG (Transportadora Associada de Gás) has initiated two hiring processes to acquire natural gas for use in the system (GUS) and flexibility services for the year 2024.
New proposals in SP Relax Market Concentration Limits in the Free Market
Arsesp (Regulatory Agency for Sanitation and Energy of the State of São Paulo) has publicly consulted a set of proposals to change the rules of the free market in the state. Changes include the relaxation of limits aimed at preventing market concentration; new rules for partially free consumers; and simplification of processes.
At the beginning of this month, Governor Paulo Dantas signed the new state law 9.029/2023, which establishes the rules for the exploration of piped gas services and the free market in the state of Alagoas. The rules were created with the aim of promoting competition and the development of this sector, bringing benefits to the economy and consumers.
Agreement between Compass and Grupo São Martinho for the Purchase of Biomethane
The company Compass has reached an agreement to purchase biomethane from Grupo São Martinho. The sugarcane company is currently in the process of building its first biomethane plant at the Santa Cruz mill, located in the interior of São Paulo. The contract will have an initial term of five years, with the possibility of renewal for another five years, and is expected to start supply in 2025.
L’Oréal has partnered with the company Gás Verde to supply 100% of the dedicated vehicle fleet for the cosmetics company, from the Gaia Distribution Center located in Jarinu (SP). The substitution of CNG for biomethane is planned for the first quarter of 2024. This measure is part of L’Oréal‘s efforts to adopt more sustainable energy sources and reduce carbon emissions.
Petrobras is studying the possibility of replacing hydrogen production from natural gas, known as blue hydrogen, with hydrogen produced from biogas or by water electrolysis. This initiative is part of the company’s efforts to reduce its environmental impact and adopt more sustainable practices in its oil refining operations.
Source: Agência EPBR
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