Natural Gas Business Overview
°
°
Antonio Castro
Executive Manager
Gas & Energy
AGENDA
 The Brazilian Natural Gas Market
 Investments in Natural Gas Infrastructure
 The Role of LNG
 New Policy for Gas Contracts
 Natural Gas Integration with Electric System
Brazilian Natural Gas Market
Brazilian Natural Gas Market – 2012 Supply and Demand
160
Million m3/d
@ 9.400 kcal/m3
140
120
134,0
43,9
134,0
(1)
31,1
LNG
30,0
Bolívia
72,9
E&P
100
80
42,1
60
48,3
40
17,5
20
25,3
0
48,0
(2)
5,5
2007
Thermoeletric
2012
Industry
(1) Others: vehicular, residencial, commercial, refinaries e fertilizer plants.
(2) Considering Maximum Dispatch of every thermoeletric power plant
Supply 2012
Others
Business Plan 2008-2012 - Investments
US$ 112,4 billion
US$ 6,7 billion in the Gas and Energy Segment
US$ 18,2 billion on the natural gas stream
Natural Gas Stream Investiment (Brazil):
US$ 18,2 billions
Business Segment Investment*
8%
58%
27%
1,4
65,1
5,0
1%
0,1
0,1
1%
2%
1,5
2,6 2,6
4,3
29,6
6,7
2% 4%
4,3
11,6
E&P
RTC
26%
G&E
6%
E&P
Petroquímica
Petrochemical
1%
RTC
Distribuição
Distribution
63%
G&E
Corporate
Biofuel
Nota: Inclui Internacional
* US$ 97,4 billions Brazil (87%) and US$ 15,0 billions International (13%)
Internacional
Distribution
Domestic Natural Gas Supply
Million m3d
80
Urucu
Bacia Campos
70
Uruguá Tambaú
Peroá-Cangoá
Mexilhão
Manati
71,1
Canapu
60
Rio de Janeiro
Espadarte Mód II
45,7
50
40
30
Camarupim
Cidade de Vitória
Golfinho Mód. 2
Lagosta
28
20
Roncador
P-52
10
Roncador
P-54
Pirapitanga
71,3
64,1
Frade
Parque das
Conchas
Albacora
(water
injection)
Marlim Sul
Módulo 3 - P-56
70,8
Espadarte
Módulo 3
Jubarte
P-57
Barracuda
(infill drilling)
Cidade Niterói
Jabuti
(FPSO)
Marlim Sul
Módulo 2
P-51
Non-associeted natural gas
Associated natural gas
Marlim Leste
P-53
0
2007
2008
2009
2010
2011
2012
General view: Production, imports and pipeline grid expansion
Pipeline Extension
2003 – 5.804 km
Urucu-Coari-Manaus
2006 – 5.877 km
+ 3.817 km
2007 – 6.511 km
Belém
2008 – 7.777 km
2009 – 8.620 km
Manaus
2010 – 9.621 km
Pilar-Ipojuca
Recife
Catu – Itaporanga
Salvador
Cacimbas – Catu
Brasília
Gasbel II
Existing
Pipeline
Paulinia - Jacutinga
Gasduc III
Pipeline being
implemented
Japeri-Reduc
Caraguatatuba – Taubaté
LNG Terminals
Natural Gas
Production Basins
Gasbol Sul - Expansion
Gaspal II / Gasan II
Pipeline construction
COARI – MANAUS Pipeline
CATU – ITAPORANGA Pipeline
Tubes for CACIMBAS-CATU Pipeline
0
Realizado
Actual
29,9
29,7
31,0
31,2
Nov
Dez
Jan
Planejado
Planned
Dez
Nov
Out
Set
Ago
Jul
31,5
2007
Jun
Mai
Abr
Mar
31,5
29,8
Out
Fev
29,2
Set
27,1
25,0
Jul
30
Ago
25,1
23,5
Mai
Jun
22,8
Abr
5
22,8
10
Mar
15
23,1
25
Fev
21,5
20
Jan
Natural Gas imports from Bolivia
millions m3/d
2008
Flexible LNG Opportunity
 The current LNG market scenario allows short term contracts,
creating opportunities to this new alternative to import LNG,
with reduced fixed costs.
 Assist on the adjusting of the supply to the Brazilian market
characteristics:
 Steady and continuous supply to the residential, industrial
and automotive demand.
 Flexible supply (guaranteed) to the power plants.
 Other benefits:
 Faster implementation.
 Failure risk mitigation to the natural gas supply due to
problems on production and delays on projects under
development.
 Diversification of the import sources of natural gas.
Flexible LNG Terminal Concept
Pier
Carrier Ship
Regasification Vessel
LNG
GUANABARA BAY TERMINAL
 Includes the construction of a LNG jetty, with 2 berths, inside the Bay.
 Regasification capacity of up to 14MMm³/d and delivery to the grid
through a 16km pipeline (submarine + on-shore).
Terminal Location at Guanabara Bay
LNG Terminal
Pier Construction
PECEM TERMINAL
 Regasification capacity
of up to 7 MMm³/d and
delivery of Natural Gas
to the grid through a
20km pipeline.
Pecem Port
PECÉM JETTY #2
ASSEMBLAGE OF THE FIRST LOADING ARM
REGAS Vessels
 Golar Winter
 Golar Spirit
 Delivery: May, 2009
 Delivered on: June 11th, 2008
 Max. Send-out: 14 MMm³/d
 Max. Send-out : 7 MMm³/d
 Storage Capacity: 138,000 m³
 Storage Capacity: 129,000 m³
LNG Supply Agreements
 Master Agreements – MSA (short term / spot arrangement)
• Price and volume to be negotiated
• Executed with Nigeria LNG (NLNG), Sonatrach, Total, Suez,
Endesa, BG, Mitsui, Marubeni, Sumitomo and Shell
• Other 20 potential suppliers – under negotiations
• Optimization of the supply for the LNG terminals
• Contracts are hybrid model between MSA (short term/spot)
and SPA (long term)  security + flexibility
 Firm Supply Agreements
• First Cargo – BG Group
• Terminal Commissioning Cargo – BG Group
• Flexible Supply for 2008 onwards (Possibility of
Cancellation and guaranteed supply)
New Natural Gas Contract Modalities
Firm Inflexible:
This cathegory bears a firm supply, with a delivery warranty from the supplier.
Firm Flexible:
Natural gas delivery can be suspended for a while (*), during which it will be replaced with
another fuel, mostly commonly fuel oil.
Interruptible:
If necessary, delivery can be suspended for a while (*). There will be no fuel replacement in
this case, but prices in this cathegory reflect that.
Preferential (Thermal Power Plants)
In this cathegory, consumers (thermal power plants only) have the option to buy the natural
gas when they will be consuming, subject to a previous notice.
(*) natural gas is alocated to thermoeletric dispatch
Natural Gas Distribution
Participation in 20 LDCs (total = 27). Market-share in 2007 = 45%
GASAP
37,3%
GÁS DO PARÁ
GASMAR
23,5%
GASPISA
37,25%
41,5%
CIGÁS
83,0%
41,5%
41,5%
41,5%
41,5%
41,5%
41,5%
34,46%
34,46%
40%
49,0%
100,0%
37,4%
32,0%
24,5%
41,0%
49,0%
Source: Abegás
Integration between Natural Gas and Power Generation
Production
Process
Imports
Distribution
Natural Gas Consumers
Regulated
by ANP
Thermal Power Plants
Electricity Consumers
Regulated
by ANEEL
Hidro Power Plants
Distribution
Transmission
Petrobras Power Generation Units
Termoceará
220 MW
17 Thermal Power Plants: 5,1 mil MW
Jesus Soares
Pereira
340 MW
DUAL-FUEL
Juiz de Fora
84 MW
Barbosa Lima
Sobrinho
386 MW
DUAL-FUEL
Luís Carlos
Prestes
252 MW
Fernando
Gasparian
370 MW
Araucária
484 MW
UNDER
Euzébio
CONSTRUCTION
Rocha
370 MW
Sepé Tiaraju
160 MW
DUAL FUEL
Petrolina
128 MW (fuel oil)
Termocabo
48 MW (fuel oil)
Rômulo
Almeida
138 MW
Bahia I
31 MW (fuel oil)
Celso Furtado
185 MW
Aurel. Chaves
226 MW
Mário Lago
922 MW
Gover. Leonel
Brizola
1.043 MW
UNDER
CONSTRUCTION
Final Comments
Huge investments throughout the Natural Gas chain
Need for supply and demand adequacy (strong influence from
thermal power plants dispatching)
LNG and new Natural Gas Contracts aiming at flexibility
Thank you very much for your Attention
CHALLENGE IS OUR
ENERGY