Brazil's ANP reaffirms efforts to set rules, open country's New Gas Market

Brazil's National Petroleum Agency, or ANP, plans an extensive regulatory agenda in 2022 aimed at consolidating new, more-liberal rules for the country's New Gas Market that ended state-led Petrobras' monopoly in the sector and opened it to greater competition.

The regulator expects to publish new rules that will simplify and clarify the New Gas Market that was signed into law in 2021, including regulations for autonomous and independent pipeline operators, reviews of entry and exit tariffs for pipelines, investments to increase capacity and new sales models, the regulator said Jan. 4.

The planned regulatory wave came amid confusion and controversy as the New Gas Market, which was signed into law in the first half of 2021, is gradually rolled out. The ANP and other government entities still need to hammer out final regulations that will unlock the market and create the dynamic, competitive business environment that officials expect. The transition also takes place amid soaring international prices for crude oil, natural gas and LNG, as well as the country's worst drought in nearly 20 years.

Petrobras is already facing lawsuits from five state natural gas distributors balking at new supply contracts for 2022, with the state-led oil and gas producer demanding increases of 50%-200%, depending on the length of the deal. Several gas distributors won court-ordered injunctions blocking the increases and maintaining current terms. Petrobras has said it will appeal the injunctions.

The New Gas Market allowed oil companies operating in Brazil to directly sell gas production to end consumers. Companies were previously required to sell to Petrobras, which handled processing, sales and deliveries. One of the key changes implemented in 2021 will allow third-party companies to contract Petrobras gas-processing facilities, pipeline access and LNG terminals, which will help facilitate deliveries from new suppliers such as PetroReconcavo, Shell, Galp and Equinor.

Petrobras also returned excess transport capacity in pipelines operated by Nova Transportadora de Gas, or NTS, and Transportadora Asociada de Gas, or TAG. That allowed NTS and TAG to hold public tenders for the capacity, granting additional gas suppliers access to the market.

TBG capacity tender

Additional access capacity is expected to be made available in 2022. Transportadora Brasileira Bolivia-Brazil, or TBG, will hold a round of open capacity offers for daily access in February, monthly access in February-December and quarterly access in the second, third and fourth quarters, according to TBG. The tender will take place Jan. 10-26.

TBG operates the Gasoduto Bolivia-Brasil, or Gasbol, pipeline, which imports gas from Andean neighbor Bolivia. The pipeline has installed capacity to transport about 30 million cu m/d.

The ANP also authorized the construction of two new LNG terminals in Santa Catarina and Sao Paulo states, the regulator said. LNG imports skyrocketed in 2021 on the drought, with Brazil injecting about 25 million cu m/d to meet gas demand. The ANP authorized 33 import licenses since the New Gas Law was signed in April, surpassing the total of 32 separate licenses approved in the previous nine-year period.

"This year, the ANP is going to continue working toward the opening of the New Gas Market by carrying out incremental public tenders for new transport supply by the three transporters, with the development of its regulatory agenda, which is extensive, and, primarily, by seeking to be a facilitator in the growth of natural gas use in the national energy matrix," the ANP said.