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Brazilian natural gas industry is promising, states report

With domestic supply and demand expected to grow in the coming decades, the prospects for the natural gas industry in Brazil are promising.

However, the legal and regulatory frameworks will need to evolve to allow the country to reap the benefits of a competitive gas market, says a report issued by the International Energy Agency (IEA).

The report titled Towards a competitive natural gas market in Brazil: A review of the opening of the natural gas transmission system in Brazil, represents the final outcome of the IEA-Brazil gas market peer-review and dialogue process in which experts from the IEA Secretariat and IEA member countries developed policy recommendations for Brazil’s Gas to Grow (Gás para Crescer) initiative.

Through its Gás para Crescer initiative, the Brazilian government sets a plan to liberalise the local market further, building on previous market reforms in the country.

Towards a competitive natural gas market in Brazil report explores lessons from European experiences that could potentially be applied to gas market reform in Brazil.

In particular, recommendations related to the establishment of independent transmission system operators (unbundling) and the design and implementation of operational and technical rules based on regulatory policies (network codes).

Natural gas supplies up

The Brazilian Ministry of Mines and Energy Gas Statistics Report shows that the average Brazilian domestic natural gas supply in 2017 reached 60.46 million m3/day, up from an average of 52.40 mm3/d in the previous year.

On the other hand, an EIA analysis based on IHS Energy, Brazil: LNG Market Profile report, indicates that LNG demand grew significantly in Brazil between 2012 and 2015 due to increased gas power generation.

Robust economic growth contributed to industrial demand growth, as well as overall power demand increase. Read more: Low-cost natural gas to fuel Africa’s economic revolution

However, the second consecutive year of economic recession reversed these trends sharply in 2016, cutting deeply into natural gas demand.

With gradually increasing domestic production and limited demand growth, LNG imports are anticipated to remain relatively low.

Babalwa Bungane
Babalwa Bungane is the content producer for ESI Africa - Clarion Events Africa. Babalwa has been writing for the publication for over five years. She also contributes to sister publications; Smart Energy International and Power Engineering International. Babalwa is a social media enthusiast.