Brazil’s Transportadora Associada de Gás (TAG) was acquired from federal oil organization Petrobras by France’s Engie and Canadian fund CDPQ in 2019.
Considering the fact that then, the fuel transporter’s variety of staff members has grown by 70%, and pipeline community growth projects have been accelerated.
The firm’s 5-calendar year prepare includes investment decision of 2bn reais (US$380mn), 50% of which is for ventures aimed at opening up the sector.
“In addition to this, there is a series of upkeep and integrity operates. These are ‘invisible’ will work, but they promise the availability of the network and supply to the town-gates,” Ovidio Quintana, TAG’s business and regulatory director, tells BNamericas.
BNamericas: TAG was privatized in 2019. What has altered in the business given that then?
Quintana: We’re coming in with much more than 170 workforce of our individual. In 2019, prior to the sale, TAG experienced about 100 staff members, 50% of which have been hired by Petrobras and 50% outsourced.
These days we function our have property, we have a contemporary supervision and regulate middle in Rio de Janeiro. We also took over the discipline management of the functions, with 16 operational details alongside the network of extra than 4,500km.
We have progressed from a unit of Petrobras to a firm with its possess staff members. And, from the market’s level of see, we built good developments, enabling the accessibility of new brokers and reworking the scheduling into truth to collaborate with the opening of the gas current market in the country.
BNamericas: How are the organization prospective buyers in Brazil?
Quintana: It’s promising, first for the reason that of the significant function of organic gasoline in the electricity transition. Secondly for the reason that of the likely that Brazil has, with its big fuel reserves. And we’re keen for the entry of new players in the industry since of Petrobras’ divestments.
Our position as a transporter is to make it probable for the get-togethers to meet, connecting all the sources of source. I consider that, with this, we make competitiveness practical, enabling source and need to be in harmony, which is basic for a sturdy and sustainable market.
BNamericas: What are TAG’s major ongoing tasks?
Quintana: One of them is the development of Gasfor II, started off by the previous Petrobras administration. It consists of a bypass in the greater Fortaleza location [in Ceará state], near Pecém, of 83km. It’s an crucial endeavor simply because the location is densely populated, and the whole challenge foresees a 2nd phase achieving Rio Grande do Norte state, giving much more potential to the area.
There is the Sergipe undertaking that we recently introduced [involving the connection of Celse’s LNG regasification terminal to TAG’s network]. And we also imagine the long run opportunity use of gasoline manufactured in the Sergipe-Alagoas basin [from Petrobras’ Sergipe Águas Profundas offshore project].
We’re also wanting at projects to raise compression in the Gasene North method, escalating the risk of trade amid the brokers and letting the regions to make professional transactions and, thus, provide down the selling price of gas.
This element of Gasene North was created for 20Mm3/d [million cubic meters a day], but its very own compression only reaches all around 10Mm3/d. With the financial investment, it would be achievable to improve the capacity autonomously in the program.
The players in the northeast region have sought far more domestic gasoline amid growing international costs, making it achievable for additional gas from the southeast to go to the northeast. So there would be additional price-advantage to the current market, which would shell out in the prolonged time period for the expenditure.
We also have a new delivery level in Bahia, in partnership with Bahiagás, which is expanding distribution to the west of the point out by way of TAG’s community.
Apart from this, there is a collection of routine maintenance and integrity is effective. These are “invisible” works, but they promise the availability of the network and shipping and delivery to the city-gates.
BNamericas: What are the prospective clients for advancement and investments in the nation?
Quintana: Our 5-year investment decision strategy foresees 2bn reais, 50 percent of which is for initiatives aimed at opening up the market place, these types of as Gasene and Sergipe. Of study course, this can be revised relying on current market desire. One more element is for upkeep and integrity, such as metering, river crossings and grid reinforcements.
BNamericas: How is the firm dealing with consumer diversification?
Quintana: In January 2021 we enabled the entry of Proquigel, from the Unigel group, the to start with free of charge gas buyer, with [fertilizer] crops in Sergipe and Bahia. We then still left a universe exactly where we only experienced contracts with Petrobras and Unigel to signal 30 contracts with new economic brokers. We understood that the route of community calls [of gas transportation contracting] would not be enough, owing to the required treatments, so we released the extraordinary contracts design, which resulted in these 30 agreements at the end of final yr.
BNamericas: Does TAG strategy to maintain general public calls for contracting transportation in 2022?
Quintana: We’re organizing documentation for new calls. But they cannot be understood as the only way to accessibility the transportation method. Just about every Monday we have an opening for new brokers to obtain the network, and the goal is for this process to become day by day and even intraday. The community connect with is nothing at all additional than a coordinated window of entry solutions for many brokers, with lengthier-time period contracts.
BNamericas: What are the main regulatory troubles these days? There are conflicts in between federal and condition laws, as viewed in the case of the Subida da Serra pipeline project in São Paulo. Recently, Sergipe point out proposed the application of the brief-haul model to stay away from future conflicts.
Quintana: One of the worries is that we have a framework with two power organizations, ANP and Aneel, and, in the scenario of fuel, 27 other people [representing 26 states and the federal district]. The harmonization concerning the legislation is elementary.
Transportation and distribution are network industries. In France, we function 32,000km, virtually 4 moments the Brazilian network, and the place also has 200,000km of distribution. But, there, transportation and distribution do not contend, they cooperate.
About the brief haul, we have an understanding of that this is a legitimate plea to request regional discounts, in the circumstance of the condition. From our facet, we check out to lead on a technical and neutral foundation. So we’ve been supporting the regulatory company with some discussions centered on experiences in England, for case in point.
But we need to be careful when adopting answers. Low cost fuel is that which competes. If, as Sergipe, I have LNG, with 14Mm3/d that will be readily available to the sector, plus 16Mm3/d from the Sergipe Alagoas basin, it will be 30Mm3/d of accessible supply in 2026 or 2027. Now, the state’s marketplace, other than for Unigel, which is a specific industrial plant, consumes all-around 300,000m3/d. So, we’ll link Sergipe to Brazil’s grid. Possibly the condition will acquire substantially much more as an exporting pole, advertising fuel to other areas.
So we want to carry out a neutral and transparent debate about this. We’re in favor of opening the marketplace.
Concerning the Subida da Serra project, what I can say is that we have reviewed with all transparency with the distribution method players. But it doesn’t make feeling to imprison a molecule, as is the case of the São Paulo venture. It has to be obtainable to Brazil, and this is improved for the distribution company in standard.
BNamericas: Any supplemental feedback?
Quintana: We have a major job forward of us to assure the availability of pure gasoline, and this is not trivial. An built-in countrywide network indicates security of offer, as well as better competitors.
We’re investing in facilitating the accessibility of new agents to the current infrastructure, with the electronic portal to potential designed with the other transporters.
And we’re harmonizing the devices. The user interface has to be consumer-friendly, so we’re concentrating on the standardization of platforms and contracts. ANP’s perform has been multiplied tenfold right away, so this effort and hard work of ours contributes to the regulator.