Pecem LNG regas terminal in Brazil approved

Eric Watkins
Senior Correspondent

LOS ANGELES, Mar. 24 -- Brazil's Agencia Nacional do Petroleo has given Brazilian transport firm Transportadora Associada de Gas (TAG) approval to construct an LNG regasification terminal at Pecem port in Brazil's northeastern Ceara state.

The terminal will built in the second pier of the port, where it will be connected to the national gas pipeline network. In addition to the LNG terminal, TAG also received approval to build facilities in Pecem for loading oil derivatives.
Under the regulator's rules, the construction permit will be valid until Oct. 26, 2010, according to the installation license issued by the Instituto Brasileiro de Meio Ambiente e Recursos Naturais Renovaveis.

Operations at the 7 million cu m/day Pecem regasification terminal will not start before August or September, according to a report in Brazil's Valor Economico newspaper.

It cited Petrobras gas and energy director Maria das Gracas Foster as saying, "We had a lot to learn during the [LNG implementation] process. In order not to run more risks, we ended up doing more studies than we expected."

The announcement marks the second delay in the planned start of the facility.

In January, Brazil's government said Pecem operations would start in July instead of in May as originally planned. Operations also will start in September at the 14 million cu m/day terminal at Guanabara Bay in Rio de Janeiro state, missing its May deadline.

Earlier this month, Petrobras and Royal Dutch Shell PLC signed an agreement under which Shell will supply LNG to Petrobras's regasification terminals at Pecem and Guanabara Bay.

By yearend, Petrobras plans to have both terminals online and able to regasify some 20 million cu m/day of LNG. Gas from the LNG terminals largely will serve the country's thermoelectric plants.

Contact Eric Watkins at hippalus@yahoo.com.

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