Govt to unveil new gas bill in a month

Brazil's government is expected to submit its new natural gas bill to congress in one month, newspaper Valor Econômico reported. The long-awaited bill is seen as a way to boost private investment in gas transport and distribution and reduce the country's dependence on Bolivian gas currently accounting for 24 million cubic meters a day (Mm3/d) of the 36Mm3/d consumed in the country. Increasing local gas production is dubbed by mines and energy minister Dilma Rousseff as the country's "plan B" to reduce dependence on Bolivian gas in the face of that country's political and social crisis. Rousseff said Friday that long-term plans include bringing forward from 2009 the scheduled start of production at the Mexilhão gas field in the offshore Santos basin and the tender of new blocks likely to have gas reserves in the seventh hydrocarbons licensing round scheduled for October. The development of Mexilhão, with 419 billion cubic meters of gas reserves, is estimated to cost US$3bn, Valor Econômico reported. Brazil's federal energy company Petrobras (NYSE: PBR) is in talks with Spanish oil company Repsol YPF (NYSE: REP) to create a joint venture to develop the field. Investors have said the lack of transport regulations and a stable price-setting methodology inhibit investments in the gas sector. The gas sector is currently regulated through a general hydrocarbons law focused on oil and Petrobras controls the transport and retail prices. Sector players say that specific regulations for the gas sector would loosen Petrobras' grip on the sector and allow more competition. While oil is an easily marketable international commodity, natural gas is not and investment decisions depend heavily on existing transport infrastructure in Brazil, which is currently controlled by Petrobras. The gas bill could also include rules for the resale of excess gas by gas-fired thermoelectric plants and the creation of a national gas operator that would direct gas needs according to power generation and consumption needs.