Petrobras believes Brazil should slow private gas consumption

Nov 02, 2007 01:00 AM

Brazil should rein in private consumption of natural gas to avoid further supply bottlenecks, the Chief Executive of state-run oil firm Petroleo Brasileiro said. Petrobras, as the company is known, denied that it is planning to increase gas prices by 30 % as Rio de Janeiro distributor Cia. Distribuidora de Gas do Rio de Janeiro, or CEG, reportedly had said. But Chief Executive Sergio Gabrielli did criticize current price levels for vehicular natural gas, or VNG.
"The price of gas today is out of synch with that of alternative fuels," Gabrielli was quoted as saying. That "stimulates gas consumption at a moment at which we should do the contrary."

Brazil has the world's second-largest fleet of cars running on VNG, after state governments for years had given incentives for the usage of the fuel in order to stimulate a budding natural gas market. Petrobras had reduced gas supplies to CEG and to Sao Paulo distributor Cia. de Gas de Sao Paulo, or Comgas, to have more gas available for thermoelectric power plants. Comgas is a unit of BG Group, while CEG is a unit of Spanish company Gas Natural.
The gas-flow reduction caused temporary production problems for industries in Rio de Janeiro and left dozens of gasoline stations without VNG. But a court in Rio ordered the oil company to reinstate previous gas supply levels to CEG. The gas reduction to Comgas wasn't affected by the court order and continued.

Gabrielli reiterated that Petrobras will appeal the Rio court decision. He added that Petrobras wants to offer distributors to supply a fixed amount of gas through one type of contract, and additional amounts through supplementary contracts at flexible terms. Delivery of the additional amount would, however, depend on the availability of gas.
The gas-supply problems had begun after Petrobras in May had given Brazil's electric energy agency Aneel guarantees to provide sufficient volumes for electricity production or face hefty fines.

Brazil's National Grid Operator, or ONS, recently has ordered more thermoelectric power plants to be switched on that previously had been idle. The measure comes as a recent drought in the Southeast has lowered the level of reservoirs of hydroelectric dams, which provide most electric power in Brazil.
Also, spot-market prices for electric power have risen lately, making the use of thermoelectric power more economically viable than usual. Normally, hydroelectric power is far cheaper than gas-fired thermoelectric power in Brazil. Although reservoir levels aren't critical, the ONS wants to spare some of the dams' capacity to avoid possible future energy bottlenecks.

Source / Dow Jones & Company
Alexander's Commentary

Change of face - change of phase

In the period of July 20 till August 3, 2015, Alexander will be out of the office and the site will not or only irreg

read more ...
« January 2020 »
January
MoTuWeThFrSaSu
1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31

Register to announce Your Event

View All Events