How Brazil's gas transporters are preparing for the upcoming supply boom

The natural gas transportation sector in Brazil is preparing for fresh supplies of 50Mm³/d of fuel to enter the domestic market over the next few years. 

By way of reference, that volume represents almost 75% of the country's total supply (domestic and imported) of the fuel (68Mm³/d) in July 2024, according to the latest data from the mines and energy ministry MME.

The growth in supply is the result of the following offshore projects: Petrobras' Rota 3 pipeline, which began commercial operations in November, Raia (Equinor), scheduled for 2028, and Sergipe Deepwater (Petrobras' SEAP), which has been postponed until after 2030.  

In addition, the sector will have to keep up with the entry of additional sources of liquefied natural gas (LNG), onshore production and biomethane, while adjusting to the reduction in supply from Bolivia and the Rota 1 pipeline. 

“We’ll reinforce compression along the existing network, as wells as in loops and pipelines for promising markets where additional demand is already well known,” Rogério Manso, president of the local natural gas pipeline transport companies' association ATGás, told BNamericas. 

“The challenge in a process of resuming investments of this magnitude is both the approval of regulatory bodies and the mobilization of resources to carry out the projects on time,” he added. 

Today, there are three major gas transportation companies operating in Brazil: Transportadora Brasileira Gasoduto Bolívia-Brasil (TBG), controlled by Petrobras; Transportadora Associada de Gás (TAG), owned by Engie, in partnership with the Canadian fund CDPQ; and Nova Transportadora do Sudeste (NTS), owned by the Brookfield group. 

Jorge Hijjar, TBG's commercial director, emphasizes that, in addition to the new domestic volumes, market expectations are driven by the potential for integration with the Argentine market, which is producing large volumes from shale formations in the southwest. 

“Furthermore, even in the face of challenges, biomethane is emerging as a promising source for the Brazilian energy mix, and TBG has the vocation to be a gateway to this energy source,” the executive told BNamericas. 

The company operates the 2,593km Bolivia-Brazil (Gasbol) gas pipeline, which crosses the states of Mato Grosso do Sul, São Paulo, Paraná, Santa Catarina and Rio Grande do Sul.

According to Hijjar, there is a proposal to implement biomethane-reception hubs along the northern stretch of the transportation system. 

He underscored that natural gas has been facing competitiveness challenges in order to become consolidated in the Brazilian market, particularly as a strategic input for the most varied sectors of industry.

Another important issue, in the opinion of the TBG director, is the feasibility of recontracting thermoelectric plants whose contracts have expired or are about to expire. 

“Without this renewal, there’s a risk that transport rates will rise due to the absence of these thermal plants in the integrated transport system,” Hijar pointed out.  

The expected solution for these plants is the backup capacity tender, which was originally scheduled for this year but ended up being postponed until 2025. 

The investment plans of TAG, which operates 3,700km of pipelines along the country's coast and 800km in Amazonas state, include new pipeline projects, compression expansion and entry and exit points for connecting new agents. 

Among these projects are the Itajuípe compression station in Bahia state, which will reduce transportation costs and increase the capacity of the Gascac pipeline by 3Mm³/d, allowing for an increase in transactions between the northeast and southeast regions of the country. 

Included in the federal government's new growth acceleration program (PAC), the project will receive an investment of around 900mn reais (US$150mn) and is awaiting authorization for construction from sector regulator ANP. 

In 2025, TAG will begin work on the Buriti exit point in Manaus, Amazonas state. The investment is aimed at supplying the expansion of the region's thermoelectric demand, notably the new Manaus I thermoelectric plant, owned by Global Participações em Energia. 

The Goytacazes gas pipeline (Gasog) will connect the Açu regasification terminal in Rio de Janeiro to the Cabiúnas-Vitória gas pipeline, boosting the supply of gas in the southeast. 

The project has been under study since 2022, with the signing of an MOU with GNA, a joint venture formed by Prumo, BP, Siemens and SPIC.

Another case is the reclassification of the gas pipeline that is part of the Bahia regasification terminal (TRBA), with a view to incorporating it into TAG's transportation network. 

“This is a project expected in the short term, promoting flexibility and safety in the Bahia network, meeting the potential increase in regional demand for domestic gas independently of imports from the terminal,” Olvídio Quintana, TAG's commercial and regulatory director, told BNamericas.

The company is also involved in a natural gas storage project, in partnership with Origem Energia. 

Origem will contribute to the JV its gas fields located at the Alagoas hub, whose reservoirs were depleted (lost pressure) by Petrobras in the past and will now be refilled with gas.

TAG will make an investment of US$200mn, which will be phased in over the next few years and used to buy equipment and prepare the reservoirs to start operating.

TAG will immediately invest US$30mn, which will allow it to reach a storage capacity of 106Mm³/y of gas. As the market develops, the company will make additional investments to reach a capacity of 500Mm³/y of gas. 

With more than 2,000km of pipeline grid and a delivery capacity of 67Mm³/d, NTS accounts for over 50% of all natural gas transported in Brazil, connecting the states of Rio de Janeiro, Minas Gerais and São Paulo to TAG and TBG pipelines, as well as LNG terminals, gas processing plants and consumers in the country's most industrialized region.

NTS's projects include the Macaé compression station (Ecomp) in Rio de Janeiro, which aims to increase the transfer limit between the NTS and TAG networks, promoting integration between the southeast and northeast markets. 

NTS is also studying potential network growth projects and future natural gas demand in regions that are not yet served. This is the case of the municipality of Extrema, in the concession area of the distributor Gasmig (Minas Gerais), and Gasinf (north of Rio de Janeiro), a gas pipeline connecting to the Port of Açu, which currently only uses LNG. 

BNamericas approached NTS to find out more about its plans, but the company declined to talk as it was preparing to release its quarterly results.