Brazil's oil and gas regulator (ANP) today authorized higher imports of natural gas to generate more gas-fired electricity as drought saps hydropower output.
ANP authorized state-controlled Petrobras to import 31mn m³ a year of LNG while thermal power generation company Ambar Energia was authorized to import 2.3mn m³/d of natural gas from Bolivia.
Petrobras got the green light to import LNG from any country through January 2023, to be delivered at the Rio de Janeiro state port of Baía de Guanabara, the Ceara state port of Pecem, and the Bahia state port of Baia de Todos os Santos, where the state-controlled company has regasification facilities.
The authorizations are among measures the Brazilian government has announced since April to try to boost thermal power generation as the largely hydropower-dependant country faces its worst drought in its 91-years of record keeping.
The imports of LNG authorized for Petrobras are the equivalent of 51mn m³/d of natural gas, about 40pc of the country's daily natural gas output.
The Ministry of Mines and Energy also ordered that all maintenance on thermal power facilities be cancelled to avoid restrictions on power generation. The Electric Sector Operator (ONS) lists in its daily report around 4,000MW of natural gas and LNG thermal power capacity that is currently unavailable because of maintenance, restrictions in operations for unreported reasons, retrofitting or suspended commercialization.
The ministry also promised to move forward the dispatch of natural gas to thermal power plants. In December, the entity estimated that 4,010MW of thermal power capacity, comprised of mainly gas, was expected to start operation by 2021 and 2022. Brazil's natural gas production in April averaged 123.9mn m³/d, while imports from its main supplier Bolivia in February averaged 20.2 mn m³/day.
President Jair Bolsonaro's office has created a special group formed by ministries and regulatory entities focused on water and energy use planning. The first meeting of the group occurred yesterday, with discussions to avoid rationing water and electricity this year. An action plan will be presented within 15 days, aiming to help maintain water levels at the main reservoirs.
Planned maintenance at Petrobras' pre-salt Mexilhao field and its Rota 1 pipeline, expected in August, would reduce the gas supply for thermal power plants, which prompted the government to discuss measures that can be adopted to avoid shortages to gas power plants. The Rota 1 pipeline has a gas transport capacity of 10mn m3/d. Measures regarding the pipeline and Mexilhao were not disclosed by the ministry.
The ministry said a recently enacted new gas law will help the country cope with hydropower generation restrictions, and help stimulate more gas supply for the country. "There will be more actors that will compete to meet eventual gas demand from the thermoelectric segment," the ministry said in an email.
