Brazilian steelmaker CSN pens gas supply contract with Petrobras

Brazilian steelmaker CSN signed a contract with state-run oil and gas firm Petrobras for the supply of natural gas to serve CSN's unit in Rio de Janeiro state. 

The contract marks the entrance of CSN into the free natural gas market and has Petrobras as the main supplier among a pool of suppliers.

“Petrobras and CSN are establishing their first commercial relationship in the free natural gas market, investing in the development of solutions to enable an open, competitive, transparent, sustainable and increasingly developed trading environment in the country, and serving as a step towards joint evaluation of new solutions in decarbonization and energy transition,” Mauricio Tolmasquim, Petrobras energy transition and sustainability director, said in a statement.

“With this move, CSN becomes the largest Brazilian industrial consumer of natural gas operating in the free market, contracting not only the gas, but also the outbound transportation, following its strategy of active operation in the natural gas sector as a way to reduce costs and create value for the company," Rogério Pizeta, CSN's energy director said in the release. 

Petrobras and CSN will also seek to develop optimizations to use natural gas in other processes, in line with the companies’ energy transition agenda. The contract with Petrobras allows CSN to migrate its existing Presidente Vargas Plant (UPV) in Volta Redonda, Rio de Janeiro state, to the free natural gas market, where Petrobras is gaining scale as well.

In the second quarter, Petrobras signed and amended natural gas supply contracts for free consumers for a volume of approximately 940,000m3/d.

The deal between Petrobras and CSN comes as metals and mining companies in Brazil are actively seeking solutions in the energy sector to reduce the volume of greenhouse emissions from their operations.