Subsea 7 Plant Moves to Rio State

By Lucy Jordan, Contributing Reporter

BRASÍLIA, BRAZIL – The newest addition to Rio de Janeiro state’s Superporto do Açu will be where Norwegian company Subsea 7 plans to begin manufacturing oil and gas pipelines in 2014. The R$21 million-per-year lease was signed following Subsea 7’s withdrawal from plans to build the project in the southeastern state of Paraná, where difficulties in obtaining an environmental license blocked the company’s first choice of location.

In 2007, Subsea 7 bought a 2600-hectare plot in Pontal do Paraná, on the Paraná coast. The Norwegian company, which has worked in Brazil – mostly with Petrobras – since 1972, specializes in engineering and construction in off-shore oil and gas exploration.

The firm wanted to find a site where it would manufacture and coat long, rigid pipelines for transporting oil and gas, as well as other subsea equipment.

The installation would have represented a substantial investment for Paraná. Subsea 7 had earmarked R$100 million for the construction of the plant, which was expected to provide 600 jobs, and pay R$4 million annually in tax.

Subsea, LLX and Rio de Janeiro state did not respond to requests for comment or confirmation that the same number of jobs would now be created in Rio de Janeiro state.

According to Clovis Borges, executive director of non-profit NGO Sociedade de Pesquisa em Vida Selvagem e Educação Ambiental (Society for Wildlife Research and Environmental Education, SPVS), following the firm’s application to install the unit in Paraná, an impact assessment was carried out by the Instituto Ambiental do Paraná (Environmental Institute of Paraná, IAP), in which environmental technicians recommended that the license be rejected.

“In spite of this negative technical report, as a political decision, at the end of 2010 the state government provided a license,” he said in an interview Monday.

“The place that the company was looking at for the installation is the most well preserved remnant of the coast south of Paranaguá city.”

Subsea 7 claimed it planned to use only three percent of the 2,600 hectares it owned, but following pressure from NGOs and, Mr. Borges says, internally from environmental technicians, the state of Paraná withdrew the license in October 2011 citing environmental reasons.

“The site is considered a pristine area and birthplace of many marine species,” a statement on the state of Paraná’s official website read.

Subsea 7 needed to find a new site, and in May of this year, the firm signed a R$21 million-per-year lease with LLX in the Superporto do Açu in São João da Barra, in the north of Rio de Janeiro state. Subsea’s plot will include a 250-meter (820-foot) long pier and two ship mooring berths, according to a statement from LLX.

LLX is the logistics arm of EBX, the commodities-based conglomerate that belongs to Eike Batista, Brazil’s richest man. Rio de Janeiro’s coast is more environmentally degraded than that of Parana, meaning obtaining new licenses for industrial development is much easier.