Brazil gas law may include bids on new pipelines

27 June 2007 18:18  [Source: ICIS news]

By John Waggoner

 

HOUSTON (ICIS news)--Brazilian lawmakers heard on Wednesday the principal points of a substitute bill for natural gas legislation, which could require competitive bids for new pipeline concessions.

 

Federal deputy Joao Maia presented his substitute bill to the Chamber of Deputies special committee that was deliberating over the country’s proposed new gas law that would regulate the transport, storage, processing, import, export and sales of natural gas in Brazil.

 

Maia said the most controversial point of the substitute bill would be the requirement for competitive bids on build-operate-transfer (BOT) type pipeline concessions to be auctioned by the National Petroleum Agency (ANP). Currently, new pipeline projects merely require authorisation from the ANP, without the bid requirement.

 

State-run Petroleo Brasileiro (Petrobras) is the principal operator of Brazil’s pipeline network and the heavy presence of the state is considered by some to be an impediment to private investment. However, Maia said the new bill would exempt existing pipelines from the competitive bidding requirement.

 

“We are guaranteeing the Petrobras plan of investments. It would be irresponsible to submit gas pipelines operated by Petrobras to the bidding,” Maia said, according to official legislative information service Agencia Camara.

 

Pipelines planned for construction as part of international political agreements and those which supply a single consumer would not require the concessions, Maia said.

 

Brazil’s petrochemical industry relies primarily on naphtha feedstock but the development of domestic natural gas reserves and infrastructure could enable an expansion of the use of ethane feeds, industry sources said.

 

“The primary focus of the legislature is the use of gas for electricity generation, but the law is of interest to the petrochemical industry,” said spokesman Luiz Carlos de Medeiros of the Brazilian Petrochemical Industry Association (Abiquim) in Portuguese.

 

In tandem with the creation of Brazil’s natural gas law, Abiquim is seeking to ensure supply of ethane feeds in case of an interruption, through a federal contingency plan taking shape in the executive branch.

By: John Waggoner
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly