Brazil's Cosan to expand natural gas pipeline network

12 November 2012 23:35  [Source: ICIS news]

NEW YORK (ICIS)--Cosan expects to lay over 2,000km of new pipeline this year in Brazil as part of its plans to expand its natural gas distribution network to residential customers, said a company executive for the major Brazilian sugar, ethanol – and now energy – producer on Monday.

The company’s strategic geographic expansion will connect over 100,000 new residential customers per year, said Luis Henrique Guimaraes, chief operating officer (COO) of Comgas, the largest distributor of natural gas in Brazil and Cosan's most recent acquisition.

Guimaraes spoke at Cosan’s annual investor day meeting in New York City.

The acquisition gives Cosan a leading edge in the Brazilian energy market while diversifying its product portfolio, said Marcos Marinho Lutz, Cosan Group CEO.

Comgas currently has over 1.1m residential customers, out of 5m potential residential customers. Between 1999 and 2011, it grew its natural gas network  from 2,500km of pipeline to 8,000km.

The residential customer segment is a high potential growth market driven by new real estate developments, and natural gas is seen as a safer alternative to liquefied petroleum gas (LPG), said Guimaraes.

Comgas increased its capital expenditure (CAPEX) by 21% from Brazilian reais (R) 50m (€19m, $24m) in 1999 to R510m in 2011, which shows the company’s dedication to growth, he said.

Cosan completed its R3.4bn acquisition of Comgas last week, Cosan announced on 5 November.

($1 =  €0.79)
($1= R$2.05)

By: Feliza Mirasol
+1 713 525 2653

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