Excelerate starts LNG operations in Bahia as Brazil imports boom

Floating specialist Excelerate Energy has started delivering natural gas to the Brazilian market at the Bahia regasification terminal in Salvador, Bahia.

The Excelerate Excelerate Sequoia Floating Storage and Regasification Unit (FSRU) has an LNG storage capacity of 173,400 cubic meters. Excelerate and the Brazilian state-owned oil company Petróleo Brasileiro (Petrobras) signed the lease at the end of September, and Excelerate is now the first private sector company to sell regasified LNG to customers in Brazil.

CEO Steven Kobos said, “I commend Petrobras for conducting a transparent bidding process as part of the Brazilian government’s efforts to open up the Brazilian gas market.

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Brazil continues to import record levels of LNG to offset declining output from its hydropower facilities amid record drought. But the LNG boom is also being facilitated by market reforms and the enactment of a new natural gas law in April that breaks the monopoly once held by Petrobras.

“This law and its implementing regulations are expected to not only cement the reform by providing legal certainty to investors, but help overcome the obstacles that have so far prevented the expansion of the market,” said Oxford Institute for Energy Studies researchers said in a recent report.

The new regulations are expected to “pave the way for a liquid and competitive market,” the researchers said, even as the energy transition “offers a shorter window to develop a liquid and transparent natural gas market.”

Imports represent around 40% of Brazilian gas demand and consumption has already exceeded pre-Covid levels. In addition, according to the Oxford researchers, “there is ample room to increase the use of natural gas, particularly in the power generation and transport sectors.” Researchers see LNG import demand increasing in the country over the next two years.

In the third quarter, Petrobras announced a 43.5% per year increase in domestic natural gas sales as demand for gas skyrocketed. Executives at New Fortress Energy Inc., in their third quarter earnings call, said 18 million gallons / day of LNG is imported into Brazil to meet energy needs, up from historic levels of around 4 million. gallons / day.

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