Brazil Senate Approves Reform of Natural Gas Distribution Sector

RIO DE JANEIRO, BRAZIL – Brazil’s Senate on Thursday, December 10th, approved the basic text of a bill to further open up the natural gas market to private competition and break the production monopoly held by state-controlled oil company Petroleo Brasileiro SA (Petrobras).

The new legal framework changes natural gas distribution from a regime of concessions by different state governments to one of authorizations by the federal oil and gas regulator, ANP, thus reducing bureaucracy in building pipelines.

The bill will also open up competition by changing the vertical structure of the gas sector so that producers (e.g. Petrobras) cannot be distributors and vice-versa.

Mines and Energy Minister Bento Albuquerque expects the law to unlock R$40 billion ($8 billion) in private investment for the gas sector, while Economy Minister Paulo Guedes said it will bring a “shock of cheap energy” for Brazilian industries.

Sources: Reuters