Brazil’s New Gas Law: Analysis, Implications, and Remuneration of Gas Processing Plants with Non-Discriminatory Access to Customers

Samuel Mathias do Amaral Junior, Janine Carvalho Padilha and Leonardo Arrieche
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Samuel Mathias do Amaral Junior: Federal University of Latin American Integration, Silvio Américo Sasdelli Avenue, 85866-000, Foz do Iguaçu, PR, Brazil
Janine Carvalho Padilha: Federal University of Latin American Integration, Silvio Américo Sasdelli Avenue, 85866-000, Foz do Iguaçu, PR, Brazil
Leonardo Arrieche: Federal University of Latin American Integration, Silvio Américo Sasdelli Avenue, 85866-000, Foz do Iguaçu, PR, Brazil

International Journal of Energy Economics and Policy, 2024, vol. 14, issue 1, 559-569

Abstract: Brazil will increasingly rely on the availability of natural gas as new discoveries in the Pre-Salt portion are explored. Currently, a substantial amount of the gas produced associated with oil is reinjected (60,84 million m³/day in 2021, according to the Ministry of Mines and Energy), with the lack of structure being one of the factors for this non-energy purpose. The New Gas Law proposes to fill this gap by stimulating investments in infrastructure. In this sense, market opening has the potential to promote the rupture of natural monopolies by providing access to infrastructure, including Natural Gas Processing Plants (NGPP). This units, in addition to conditioning the gas for sale, allow the recovery of higher molecular weight fractions, or (Natural Gas Liquid). However, the instructions for this access required by the government are insufficient for issues related to the NGL recovery efficiency of these units, as well the method of remuneration arising from the NGL production capacity. It is proposed in this paper to include a processing tariff, based on static simulation of available technological routes. Comparison of energy spent and NGL recovery efficiency will allow to formulate the gas price, unfolding from the price of the molecule.

Keywords: Natural Gas; Natural Gas Processing Plants; Brazil’s New Gas Law; Processing Tariff; Natural Gas Regulation (search for similar items in EconPapers)
JEL-codes: P48 (search for similar items in EconPapers)
Date: 2024
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