Petrobras Gets Permit to Transport Gas From Brazil’s Top Field

Petroleo Brasileiro SA received an environmental license to transport natural gas from Brazil’s largest oil field, paving the way for the state-run producer to boost output from the deep-water deposit.

The license allows Petrobras to connect pipelines from the Lula field, formerly known as Tupi, to the Mexilhao field in shallower waters, Brazil’s Ibama environmental agency said today in an e-mailed statement. Ibama also issued a license for another pipeline at Mexilhao and gave Petrobras permission to produce natural gas and condensate.

Petrobras currently burns off the gas it produces now as a byproduct of oil output at Lula. Petrobras was waiting for a way to transport the fuel before expanding operations because it can’t boost oil production without also tapping the natural gas.

“Right now they are flaring the gas, and there are limits to that, so they can’t increase production,” Wagner Freire, an independent energy consultant and former exploration and production manager at Petrobras, said in a telephone interview from Rio de Janeiro.“They need the pipeline to increase production and stop flaring the gas.”

Flaring occurs when oil companies burn the natural gas that they can’t transport or inject back into the reservoir. Brazil has restrictions on natural-gas flaring to limit emissions into the air.