Institute of the Americas Roundtable Energy in Brazil Natural Gas Role in the Brazilian Energy Matrix Rio, October 23 rd, 2015 Décio Oddone Oil & Gas Projects Officer Prumo Logística Global
Brazil: NG Consumption Profile 2014 consumption: 100 MMm 3 /day: Residential: 0,97 MMm 3 /day Commercial: 0,77 MMm 3 /day Industrial: 43,19 MMm 3 /day Transport: 4,96 MMm 3 /day Natural Gas Consumption Distribution Brazil (MMm 3 /day) 1% 5% 3% 47.37% 43% Power Generation: 47,37 MMm 3 /day Co-Generation: 2,57 MMm 3 /day Other: 0,17 MMm 3 /day Residential Industrial Transport Other Commercial Power Generation Co Generation Source: Boletim Mensal de Acompanhamento da Indústria de Gás Natural n 94 Jan/15 MME
Brazil: Natural Gas Production/Imports Profile 2014 volumes origin: Bolivia: 32,82 MMm 3 /day Argentina: 0,18 MMm 3 /day LNG: 19,93 MMm 3 /day Average Natural Gas Production/Importation Brazil (MMm 3 /day) 44% 33% Onshore Production: 2,68 MMm 3 /day Offshore Production: 44,39 MMm 3 /day 2.68% Bolivia LNG Offshore Production 20% Argentina Onshore Production Source: Boletim Mensal de Acompanhamento da Indústria de Gás Natural n 94 Jan/15 MME
Brazil: Natural Gas Consumption Evolution Affected for specific events MMm 3 /day Average 120.00 100.00 80.00 GASBOL 60.00 40.00 20.00 Natural Gas Consumption Development LNG TERMINALS NG FIRED POWER PLANTS NEXT RELEVANT EVENT INCREASING OFFER AND COMPETITION 2019 ONWARDS 0.00 Source: Anuário Estatístico Brasileiro do Petróleo, Gás Natural e Biocombustíveis - ANP
Natural Gas Market in Brazil SE region market SE region: 66% NG consumption 60% Power consumption (SE/CO) 88% O&G Production 56% PIB Most of infrastructure currently controlled by Petrobras
Brazil: Evolution of Natural Gas Regulation Since the Gas Bill approval, modification on pipelines grant, new pipelines construction initiatives, transport contracts and transport tariffs were implemented: Gas Pipelines Petrobras O&G Monopoly (until 1997) Petrobras Oil Bill (1997) Free initiative of Market Players Gas Bill (2009) Proposed by MME Present day (2015) Petrobras Subsidiaries Transport Contracts Petrobras Submitted to ANO within 15 days after signing Previously approved by ANP Previously approved by ANP Transport Tariff Petrobras Negotiated by the parties Established or approved (authorized pipelines) by ANP Established or approved (authorized eipelines) by ANP Third part access Petrobras Negotiated by the parties Regulated by ANP Existing pipelines exclusivity for 10 up to years. Possible after 2019 Importation and Exportation Petrobras ANP Authorization MME Authorization MME Authorization Commercialization Petrobras Unspecified Approved by ANP Approved by ANP (Mostly Petrobras supplied)
Brazil: Evolution of Natural Gas Infrastructure LNG LNG LNG Before GASBOL GASBOL After GASBOL
Natural Gas Market in Brazil Tendencies 2009 NG Bill complete implementation Initial real open access after 2019 Optimization of the regulatory system Reduction of Petrobras investments in NG Increase in GN usage for power generation infrastructure GN fired power plants on the base load Petrobras divestments
Natural Gas Trading in Brazil What is next? A significant change in the NG market GASBOL New LNG Terminal LNG/CCPP New LNG Terminal /CCPP New LNG Terminal LNG/CCPP New distribution companies GN contracts: 2019 New GSA with YPFB (Bolivia): 2019 Availability of Henry Hub referred LNG in the Atlantic Basin Additional offer of offshore NG in the SE region
Natural Gas Market in the SE region Opportunities for new players to enter into the market Offshore producers LNG suppliers Midstream players Trading companies Power generators Logistic and service companies BM C 35 BM C 33 BM C 30 e BM C 32 BM C 34
Natural Gas market in the SE region Industry needs to develop new infrastructure AÇU PORT GASCA V 50 Km GASCA B Açu Port is the most convenient location for a new Gas, Power and Oil Hub in Brazil
Institute of the Americas Roundtable Energy in Brazil Natural Gas Role in the Brazilian Energy Matrix Rio, October 23 rd, 2015 Décio Oddone Oil & Gas Projects Officer Prumo Logística Global