Brazil's SCGas, SulGas top bids in third GasBol pipeline capacity sale

State natural gas distribution companies in Santa Catarina and Rio Grande do Sul states joined state-led oil company Petrobras to claim exit capacity on the Gasoduto Bolivia-Brasil pipeline, or GasBol, in 2024-2026 after Brazil's National Petroleum Agency, or ANP, completed the country's third public tender for transport capacity.

The auction was completed June 10, with final results posted by pipeline operator Transportadora Brasileira Gasoduto Bolivia-Brasil SA, or TBG, June 15. TBG handles capacity sales under the auspices of the ANP, which is Brazil's lead regulator for the oil and natural gas industry.

The sale represented the latest advance in Brazil's New Gas Market regulatory regime, which was implemented in April 2021. The new rules officially ended Petrobras' monopoly in Brazil's natural gas segment, with an eye toward creating greater competition, increasing production, and reducing consumer prices in Latin America's biggest economy. Petrobras ceded capacity on GasBol and sold off its stakes in two other major Brazilian pipeline networks in court-ordered moves that expanded pipeline access across the country.

The final results also bring to a conclusion the long-delayed capacity auction. The third GasBol capacity sale was originally planned for 2021 but was delayed by coronavirus-related restrictions and implementation of the New Gas Market. Brazil previously held public tenders for pipeline capacity in 2019 for 2020-2024 and in 2020 for 2021-2025.

The third capacity sale for GasBol restarted May 4 after the ANP temporarily suspended the sale Feb. 21 amid a dispute over the final results brought by Companhia de Gas do Estado do Rio Grande do Sul, or SulGas. SulGas called for annulment of the sale after the company failed to agree to gas supply contracts with producers, raising concerns about gas supplies to the state in 2024-2026.

The ANP ratified results of the sale because the auction adhered to all rules established under the New Gas Market, but reopened bidding for exit capacity in the SC2 zone in Santa Catarina state in 2026 and the RS1 zone in Rio Grande do Sul state in 2024-2026.

The reopening came after TBG announced a project that will boost transport capacity on GasBol's southern tranche serving the two states in Brazil's extreme south. The project is expected to be completed by 2024, when issues surrounding gas supplies were expected to arise.

State distributors rise

Companhia de Gas de Santa Catarina, or SCGas, claimed 1.469 million cu m/d of exit capacity in Santa Catarina state's SC2 zone in 2026, TBG said. Under terms of the original tender and before the expansion project was announced, TBG had made 1.18 million cu m/d of exit capacity available in 2026.

SCGas ended the sale holding rights to 3.72 million cu m/d of exit capacity in the SC2 zone in 2023-2026, the results showed.

SulGas and Petrobras divided exit capacity in Rio Grande do Sul state's RS1 exit zone, with SulGas claiming the majority, TBG said. SulGas was awarded 1.094 million cu m/d of exit capacity in 2024, 1.097 million cu m/d in 2025 and 1.656 million cu m/d in 2026.

Petrobras, meanwhile, was awarded 634,000 cu m/d of exit capacity in the RS1 zone in 2024, 631,000 cu m/d in 2025 and 72,000 cu m/d in 2026, according to the results.

Under terms of the original tender, the RS1 zone had 1.084 million cu m/d of capacity available in 2024, 1.081 million cu m/d in 2025 and 1.172 million cu m/d in 2026.

SulGas ended the sale holding rights to a total of 4.07 million cu m/d of exit capacity in the SC2 zone for 2023-2026, the results showed.

Petrobras, meanwhile, ended the auction holding all 19.858 million cu m/d of entrance capacity at the Corumba and GasCar entry points, according to the results.

In addition, Petrobras also secured 935,000 cu m/d of exit capacity from Sao Paulo state's SP1 exit point in 2022 and 11.836 million cu m/d of exit capacity from the state's SP2 exit point, which was the largest exit capacity available from a single station, TBG said.

Petrobras also claimed 3.8 million cu m/d of exit capacity in the SC1 zone in 2022-2025, the results showed. In the SC2 exit zone, Petrobras won 2.34 million cu m/d of exit capacity in 2022-2025. Petrobras also secured 3.24 million cu m/d of exit capacity in the RS1 zone in 2022-2023.