Brazil wants Equinor to bring forward gas flow from Bacalhau

An internal document from ANP suggests Brazil’s oil and gas regulator wants Equinor to bring forward the flow of natural gas from the Bacalhau field in the pre-salt Santos basin. 

Bacalhau is scheduled to start operating in May 2025 through a new FPSO of the same name. Chartered by Modec, it will have the capacity to produce 220,000b/d of oil and process around 15Mm3/d of natural gas. But in the first phase, budgeted at US$8bn, there will be no export of gas to the coast. 

The current timetable for the second phase of the project's development foresees that gas flow would only begin in 2037, five years after the start of production from the wells in the second phase, which is scheduled for 2032.  

The second phase could take place via tie-back, eliminating the need to install a second FPSO. The technical feasibility of connecting complementary wells in phase 2, as well as the flow of gas from the same FPSO, was proven by a study carried out by Aker Solutions. 

Equinor argues that gas flow would not be possible before 2037; otherwise, the reservoir pressure would be compromised. 

But, according to an internal ANP document with suggestions for Bacalhau (available for download in the Documents box), the Norwegian oil company's understanding indicates the need for a more in-depth study of the injection balance by anticipating water injection in order to replenish the reservoir's energy.

According to the current schedule, the injection of water is only expected to take place in 2027, two years after the first oil from the first phase.

At its next board meeting on December 13, ANP will analyze the company's request to postpone the deadline for submitting the concept for the second phase of the project to December 2026. 

The agency is expected to grant the request, provided that Equinor makes efforts to bring forward the gas flow and water injection tests at FPSO Bacalhau to mitigate the reservoir uncertainties pointed out and prevent the loss of energy from the reservoir.

The ANP's concern about gas flow aligns with the federal government's efforts to develop Brazil's natural gas market. 

Today, more than 60% of the gas produced in the country is reinjected to recover more oil. This is also due to the lack or difficulty of access to flow and processing infrastructure and uncertainties regarding demand since a significant part of Brazilian consumption is thermoelectric and subject to seasonality. 

In September, the government issued a gas decree granting the ANP authority to evaluate the conditions for reducing natural gas reinjection to make more fuel available for industrial and residential consumption.

Equinor holds a 40% stake in Bacalhau, with ExxonMobil (40%) and Petrogal Brasil (20%) as partners in the project.