Petrobras is discussing seven new potential natural gas supply contracts in its efforts to increase Brazil's domestic gas supply and lower prices for consumers, Reuters reports, quoting sources close to the talks.
Brazil's state oil and gas giant is under pressure from the government to boost local gas supply from its offshore oil and gas projects and reduce domestic gas prices, according to Reuters' sources.
Petrobras is thus negotiating seven new supply deals for gas expected to come from three projects offshore Brazil, which are being developed with partners and expected to come online by 2028.
The three projects will need investments of $1.06 billion (5.2 billion Brazilian reals), according to the sources.
The first project expected to come on stream in 2024 is the so-called Rota 3 development, which is planned to increase the flow of natural gas from projects in operation in the Santos Basin pre-salt area. According to Petrobras, the Rota 3 gas pipeline from the offshore Santos Basin to the Comperj petrochemicals complex in the state of Rio de Janeiro will be able to deliver 18 million cubic meters of gas per day to the gas processing unit.
Two other projects also involving offshore gas pipelines are expected to start delivering similar quantities of natural gas in 2028.
Last month, Petrobras entered into two new contracts for the purchase and sale of natural gas with Companhia de Gás de Santa Catarina - (SCGÃS), effective as of January 2024 and 2026, and both expiring in December 2034, in the estimated amount of $1.55 billion (7.6 billion reals).
Earlier this year, Petrobras launched a new commercial portfolio for natural gas in a move that will see the company expand and diversify deadlines, benchmarks, and places of delivery in a bid to become more competitive.
"With the opening of the natural gas market, which already has contracts with more than 14 suppliers, the company has developed a new commercial portfolio for the sale of natural gas with diversified terms, indexers, and place of delivery, with the objective of ensuring its competitiveness in the public calls being made by the state distributors and in the commercialization via the Free Market," the Brazilian state firm said in a statement.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More