Brazil contract roundup: Equatorial-Fiocruz, Gerdau-Naturgy-Petrobras, and more

A number of energy-related contracts have been announced recently in Brazil. 

BNamericas takes a look at the deals for goods and services in the oil, gas and electric power sectors. 

Equatorial Energia and Fiocruz

At the end of June, Echoenergia, the Equatorial group's generation and energy sales platform, signed a public contract with Fiocruz, a scientific institution in Brazil dedicated to health and biomedical research, to supply renewable energy through the free energy market. 

In all, 10 of Fiocruz's units in five states (Rio de Janeiro, Bahia, Ceará, Amazonas and Minas Gerais), plus the Federal District, will be supplied with electricity from Echoenergia's plants.

The contract provides for the supply of approximately 320GWh of renewable energy by December 2025.

Gerdau, Naturgy and Petrobras

Gerdau, Naturgy and Petrobras have signed contracts for the supply of natural gas in the free market environment to serve Cosigua, Gerdau's long steel production unit in Rio de Janeiro. 

The agreement marks the first migration of a customer in the state from the captive industrial market to the free market, whose new rules were recently approved by the Rio de Janeiro regulatory agency.

Petrobras and Subsea 7

Subsea7 has signed long-term charter contracts for flexible line launch vessels (PLSVs) with Petrobras. 

The agreements, which will begin next year and have a combined value of more than US$1.25bn, involve the vessels Seven Rio, Seven Sun and Seven Waves. 

Petrobras and DOF

Petrobras has awarded the firm DOF two long-term contracts: a major contract for the Skandi Niterói PLSV and a very large contract for the Anchor Handling Support vessel (AHTS) Skandi Botafogo.

DOF defines a major contract as a contract with value between US$200mn to US$300mn and defines a very large contract between US$100mn to US$200mn.

Eneva and Linhares Geração

Eneva has signed a natural gas supply contract with Linhares Geração, which is responsible for operating and maintaining the Luiz Oscar Rodrigues de Melo thermoelectric plant (204MW) in Espírito Santo state. 

With a supply volume of up to 1.07Mm3/d (million cubic meters per day), this is the first contract for the sale of natural gas to a thermal plant signed by private agents.

The contract is valid for 15 years, with supply starting on July 1, 2026.

New Fortress Energy and Omega Engenharia 

New Fortress has signed a contract to buy Omega Engenharia's Lins natural gas thermoelectric plant (2.05GW) in São Paulo state. 

The transaction is being analyzed by local antitrust authority Cade.

Transmission deals

Brazil's electric power watchdog Aneel and representatives of the companies who won the transmission auction held in March signed the related concession contracts. 

With investments of around 18.2bn reais (US$3.2bn), the tender ended with all 15 lots having been acquired.

Contract terminated

Last Friday, Petrobras announced that it had terminated the toll industrialization contract signed with Unigel at the end of 2023. 

According to the state-owned company, the conditions of the agreement were not met within the established timeframe. 

In 2020, Unigel leased Petrobras' fertilizer units in Bahia and Sergipe states for 10 years. 

The purpose of the tolling agreement, which lasted for eight months, was to allow the plants to continue operating due to the financial difficulties experienced by Unigel.

Petrobras stated that the contractors are still analyzing a definitive, profitable and viable solution for supplying fertilizers to the Brazilian market.