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    Industry says ANP shutdown hurts new gas market

    January 28, 2022 - CE Noticias Financieras


      Associations representing the industry and large energy consumers are asking the government to speed up nominations for the ANP (National Petroleum, Gas and Biofuels Agency) board, which today has only two members for the five vacancies on the board.

      They allege that the scenario harms the process of opening the Brazilian natural gas market, which depends on regulatory changes to facilitate the entry of new fuel suppliers and reduce Petrobras' share.

      "Regulation is important to provide predictability to negotiations and favor isonomic and non-discriminatory access to the market for new agents, in addition to ensuring investment decisions that are capital-intensive and have long maturation periods," the text says.

      Edifício-sede da ANP, no Rio de Janeiro

      Edifício-sede da ANP, no Rio de Janeiro

      ANP headquarters building, in Rio de Janeiro - Sergio Moraes - 5.nov.2019/Reuters

      Currently, only the director-general, Rear Admiral Rodolfo Saboia, and director Symone Araújo are titular. Two other vacancies are held by substitutes chosen by the government from among the agency's technical staff. The fifth seat is empty.

      At the meeting this Thursday (27), for example, only three directors decided on issues such as contract term extension and the questioning in the courts of a São Paulo government decree that favors the Cosan group by allowing Comgás to build a gas pipeline connecting the coast to the capital.

      In addition to Saboia and Araújo, both appointed during the Bolsonaro administration, agency superintendent Marcelo Castilho occupied a vacancy as a substitute. His term in this position, however, ended soon after the meeting.

      The situation tends to get worse with the end of Araújo's term, which expires in November. In December 2020, the Senate Infrastructure Services Commission approved Tabita Loureiro's nomination for a vacancy at the ANP's board of directors, but the sabatina in the house plenary, necessary for her nomination, has not yet taken place.

      "It is essential to ensure the completeness of the governing body, which will be responsible for directing the fulfillment of the regulatory agenda and the strategic implementation of the necessary rules," says the industry manifesto, which also calls for strengthening the technical area of the regulatory body.

      The text is signed by associations linked to the oil and gas, chemical, glass, textile, metallurgical, construction materials and beer industries, among others.

      The signatories state that the new Gas Law, approved in 2021, brought expectations of greater competition in the supply of natural gas, but the development of the market depends on regulations to detail and put into practice the guidelines approved in Congress.

      "In addition to its other multiple responsibilities, it is up to the Agency to face the gigantic challenge of designing and implementing the new rules that will guide the opening of the market aiming to accelerate the transition to a competitive market," highlight the authors of the manifesto.

      The opening of the natural gas market was one of the first flags of the Minister of Economy, Paulo Guedes, at the very beginning of President Jair Bolsonaro's mandate. When launching the program, Guedes promised a "cheap energy shock", with a reduction in fuel prices by half.

      So far, however, few companies have managed to break the state monopoly on gas supply. Domestic producers, such as Shell and Petrorecôncavo, and liquefied gas importers, such as Golar Power and Compass, have already signed contracts with state distributors.

      Only one large consumer, the fertilizer manufacturer Unigel, was able to buy gas directly from producers, becoming a free consumer, a figure that is considered fundamental in the new model foreseen for the sector.

      Forced by Cade (Administrative Council for Economic Defense) to sell its stakes in gas pipelines and distributors, Petrobras has been in conflict with the sector after announcing increases of 50% in the sale value of the fuel in new contracts starting in 2022.

      Several states went to court and obtained injunctions against the increase, which Petrobras justifies by saying that it will need to import gas at higher prices on the international market to be able to supply the market.

      The ANP said it will not comment on the subject. The MME (Ministry of Mines and Energy) has not yet manifested itself.


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