Spotlight: Brazil’s new planned offshore gas pipelines

Brazil’s environmental agency Ibama is analyzing at least three projects to deploy new offshore gas pipelines, according to data obtained by BNamericas via the federal freedom of information act. 

Through Rota 4 Participações, Compass Gás e Energia plans to install the Rota 4B route, consisting of a 313km offshore stretch and a 2.5km onshore line. 

Rota 4B/ Source: Ibama

The undertaking is designed to bring natural gas from block BM-S-8 in the Santos basin, where Equinor’s Bacalhau pre-salt field is located. 

The project also includes a natural gas treatment unit in Santa Cruz, in the city of Rio de Janeiro, with an area of 800,000m2. 

The byproducts expected are liquefied petroleum gas and natural gasoline (C5+).

The new owner of federal oil company Petrobras’ former gas distribution holding Gaspetro, Compass belongs to the Cosan group, which also owns Comgás, São Paulo state’s main natural gas distributor.

Meanwhile, Offshore Solutions Brasil (OSB), of the Vale Azul group, has submitted two pipeline projects to Ibama. 

Rota 4C involves the expansion of the natural gas outflow infrastructure from the producing areas of the Santos basin pre-salt by installing a gas pipeline connecting them to Vale Azul’s Macaé port terminal Tepor, in Rio de Janeiro state.

The project involves a 339km pipeline, 334km of which would be off the coast. That stretch will be complemented by five collector branches of 135km, 204km, 53km, 79km and 125km. 

Natural gas flow capacity is put at 40Mm3/d (million cubic meters a day). 

Rota 4C/Source: Ibama 

And Rota 5B consists of a 140km pipeline (135km offshore) that will bring gas from the Campos basin to Tepor. 

With capacity to transport 40Mm3/d, the pipeline will have its offshore stretch complemented by three branches of 130km, 67km and 108km. 

Rota 5B Source: Ibama

In April, Vale Azul received a license to install a 60Mm3/d gas processing unit in Tepor, which involves oil and derivatives handling and storage infrastructure, plus a regasification and an offshore logistics support terminal. 

OUTLOOK

Brazil currently produces approximately 130Mm3/d of natural gas but reinjects about 60% to recover more oil and due to the lack of offshore pipelines. 

The country has two main offshore routes (Rota 1 and 2) and is set to gain a third, Rota 3, whose startup has been postponed to 2023. 

The government envisages that full capacity of the ducts will be achieved by 2025. From that year, it would be necessary to deploy new gas pipelines in the Santos and Campos basins to increase transport of pre-salt natural gas to shore for export. 

Federal energy research firm EPE has, so far, mapped 11 indicative projects of gas pipelines connected to processing units, seven of them based on pre-salt volumes and another four based on post-salt volumes. 

The pipelines are about 2,100km long in total, and some of them offer options to transport gas from the same sedimentary basins (Santos, Campos, Espírito Santo-Mucuri and Sergipe-Alagoas).

Considering the construction of only one alternative for each basin, the projects could add more than 77Mm3/d of export capacity from offshore areas, in addition to natural gas processing units with total capacity of over 70Mm3/d.  

Source: EPE

CHALLENGES 

Among the hurdles for Brazil to move forward with the new offshore pipeline projects are the high investments required and uncertainties regarding future demand for the fuel. 

A significant portion of domestic consumption of natural gas is absorbed by thermal plants, which demand flexible supply, since during wet periods several units are not required to operate given hydroelectric capacity. 

According to the latest data from the mines and energy ministry (MME), 4.16Mm3/d of natural gas were earmarked for power generation in June, around 10 times less than a year earlier, given the recovery of hydrologic conditions. 

The main consumer of gas in Brazil is the industrial segment, which demanded 40.6Mm3/d in June. 

So the growth of the local gas market will be strongly linked with the industrialization of the country, while depending on the expansion of its gas transport and distribution grids. 

ELETROBRAS TENDERS

A potential development vector is the mandatory contracting of 8GW in new gas-fired thermal plants by 2030 foreseen in the Eletrobras privatization law. 

Scheduled for September 30, the first tender will hire 1GW in the north region, in addition to 300MW in Maranhão state and 700MW in Piauí, prioritizing domestically produced gas. 

“This can greatly leverage national production,” Helder Ferraz, the commercial director of Nova Transportadora do Sudeste (NTS), told BNamericas. 

Bought by Brookfield and Itaúsa from Petrobras, the company is one of the three main natural gas transporters in Brazil, alongside Transportadora Associada de Gás (TAG) and Transportadora Brasileira Gasoduto Bolívia-Brasil (TBG). 

In an interview that will be published in full on Friday, Ferraz said that NTS plans to conclude a new key pipeline by November in Rio de Janeiro state. 

Dubbed Itaboraí-Guapimirim (Gasig), the infrastructure will connect Petrobras’ new gas processing unit in the Gaslub hub, which will receive offshore, pre-salt field through the Rota 3 pipeline, to NTS’s grid.