Brazilian fuels agency suspends public call for Bolivia-Brazil gas pipeline

RIO DE JANEIRO, BRAZIL – The National Petroleum, Natural Gas, and Biofuels Agency (ANP) has temporarily suspended the public call for a bid for the Bolivia-Brazil gas pipeline, operated by the transporter TBG. The decision was communicated on Wednesday, February 23.

The suspension is in response to the annulment request submitted by the Rio Grande do Sul State piped gas distributor, Sulgás. The company said the call “demands a model with a longer maturation time” to preserve daily natural gas delivery capacities, “thus not limiting the state’s economic growth prospects.

The call for tender for Public Call No. 3/2021 for the gas pipeline was launched by the ANP on January 17, ending on Friday, February 25, when the contracts would be signed.

The objective of the call is to contract the available capacity to transport natural gas through the pipeline between 2022 and 2026. There are 38 million cubic meters of gas per day to be injected into the network by gas producers or traders this year.

Petrobras was the only winner to submit a gas entry offer, meaning it would be the only one to sell the gas to distributors via the Bolivia-Brazil pipeline. SCGás, on the other hand, the distributor of Santa Catarina State, and Sulgás contracted output capacity to receive the gas transported through the pipeline. In practice, they could only buy the input from Petrobras.

One of the main complications of the public notice is the expected displacement of about 600,000 cubic meters per day from Rio Grande do Sul to Santa Catarina as of 2024. Today, the demand from Rio Grande do Sul is about 1.7 million m³/day, a volume that is already considered by the sector to be less than ideal.

In recent weeks, SCGás and the Brazilian Association of Piped Gas Distribution Companies (Abegás) appealed to the ANP to extend the deadline for the call. They requested 30 more days to present proposals by the companies, which was set in the public notice for February 9.

In the letter addressed to the ANP’s director-general, Rodolfo Saboia, Abegás declared that, although the terms of the public notice were the same for all, they could harm market agents that were not gas producers or that already had contracts with TBG.

The ANP opened five working days for the manifestation of all the participants in the contest, counted from the date of the publication of the Dispatch in the Official Federal Gazette (DOU). If the agency maintains the conditions and the result of the dispute, the case should be taken to court by agents of the gas market.