By Rodrigo Orihuela
Feb. 28 (Bloomberg) -- Petroleo Brasileiro SA, South
America’s second-largest buyer of liquefied natural gas, is set
to boost imports as much as 31 percent to supply thermal plants
as Brazil’s record drought causes hydro-dams to dry out.
Rising consumption at gas-fired plants means the country’s
average daily LNG import needs will rise to 21 million cubic
meters (742 million cubic feet) this year from 16 million last
year, said Marco Tavares, chairman of Rio de Janeiro-based
research firm Gas Energy.
Faced with the worst drought since at least 1972 in parts
of Brazil, the government has ordered utilities to switch on
gas-fired plants that are more expensive to operate as dams that
account for more than 70 percent of the country’s generation
capacity run short of water.
Petrobras, as the state-run crude producer is known, is the
only Brazilian importer of LNG, which it processes at three
plants before supplying power producers. The company acquires
LNG on the spot market based on domestic demand, rather than
through long-term contracts.
Petrobras is buying LNG at about $18 to $19 per million
British Thermal Unit and selling it in Brazil at subsidized
prices of $11 to $12, said Tavares, who was the head of gas
marketing at Repsol SA’s Brazil unit before co-founding Gas
Energy in 2005.
Last year, LNG accounted for 14.5 percent of Petrobras’s
total gas supplies, up from 8.4 percent the previous year,
according to company earnings reports published Feb. 25. The
company imported 64 shipments of LNG in 2013.
Press officers at Petrobras didn’t have an immediate
comment when contacted by e-mail. Petrobras acquires gas on the
spot market during the year based on domestic demand, Jose
Alcides Santoro, the company’s director for gas, said in a Feb.
26 press conference.
YPF SA is South America’s largest buyer of LNG.
For Related News and Information:
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Petrobras Loses From Sale of Cheap Natural Gas: Corporate Brazil
Petrobras News: PETR4 BZ CN
Petrobras financial analysis by product:PETR4 BZ FA
--Editors: Carlos Caminada, Stephen Cunningham
To contact the reporter on this story:
Rodrigo Orihuela in Rio de Janeiro at +55-21-2125-2517 or
To contact the editor responsible for this story:
James Attwood at +56-2-2487-4019 or
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