Brazil gas shippers' council to push regulations

Brazilian natural gas shippers will help pipeline operators and oil and gas regulator ANP draft regulations for capacity deals and the terms for gas transportation services.

Six associations, representing 163 gas shippers, created the Pipeline Transportation Council of Consumers (CdU) in March to encourage ANP to develop new rules and find a balance between the needs of the pipeline companies and the shippers.

ANP must open to public comment the constitution and governance rules for the CdU before final approval, but the group is already holding monthly meetings.

The need for an organized gas shippers' group emerged before the new gas law was launched, in the early discussions of the Gas para Crescer governmental program, in 2016. Gas consumers asked the federal government and ANP to create an independent grid operator, similar to the one in the power sector, but the idea was not approved. Without a unique pipeline operator for the entire network, gas consumers have asked the regulator to instead create a council to represent their needs to pipeline operators.

The creation of the CdU is seen as important to gas consumers, but would not be so crucial if ANP was up to date with its regulatory agenda, an industry officialtold Argus, which is "very" delayed.

CdU's board will be comprised of president Sylvie D'Apote, Brazilian oil and gas producers association IBP's natural gas director; vice-president Adrianno Lorenzon, natural gas director at the large energy consumers association Abrace; and executive secretary Daniela Santos, a lawyer for the independent oil and gas producers association Abpip. They will serve a two-year term, which may be extended for another two years.

The official agenda for the group will be voted on at a later date, D'Apote said. But some of the most pressing issues are the need to expand pipeline capacity; connect and integrate the operations of the three main pipeline areas, held by pipeline companies TAG, NTS and TBG; define natural gas transportation services; increase transparency for the services and tariffs to transport natural gas; and defining the network codes that meet the gas shippers' needs and limitations.

Another important pending discussion that the CdU wants to be a part of is the methodology for the regulatory assets' base value for pipeline companies, a topic that weighs heavily on tariffs' calculation and affects the payoff time for the assets. Consumers argue asset construction costsshould not be part of the tariffs paid by consumers, as the investment for the assets has already been paid off.

Gas distributors association Abegas did not support the creation of the CdU at first. The current model of access to the transportation pipelines, in which there are different contracts for entry/exit capacity, requires participants to be closely coordinated. Distributors feel they should have more representation among pipeline users and inside CdU, as they still must hold both ends of the capacity deals in most operations, many sector participants told Argus.

But Abegas later decided it was better to join the discussions and take part in the CdU so it could also weigh in.

By Flávia Pierry