Brazil to triple natural gas consumption by 2010, minister says

Oct. 11, 2004
Brazil to triple natural gas consumption by 2010, minister says Brazilian energy officials expect their country to consume 117 million cu m/day (cmd) of natural gas by 2010, compared with today's average of 35 million cmd. By 2007, gas consumption is expected to reach 50 million cmd.

Brazilian energy officials expect their country to consume 117 million cu m/day (cmd) of natural gas by 2010, compared with today's average of 35 million cmd. By 2007, gas consumption is expected to reach 50 million cmd. Last August, Brazil's gas consumption reached a record-high 35.5 million cmd.

Brazilian Mines and Energy Minister Dilma Roussef made this forecast Oct. 4 at the Rio Oil & Gas Expo in Rio de Janeiro.

In August Brazil imported 21 million cmd of gas from Bolivia and 900,000 cmd from Argentina.

"During August the average production in Brazil was 46.3 million cmd, but part of this total is flared or reinjected in wells, not reaching the consumer market," the minister said.

Displacing oil

The government intends to use gas to displace diesel and fuel oil in electric power generation and is discussing a regulatory framework to accommodate the change.

"The 1997 petroleum law, which opened the sector to private competition, only has one paragraph referring to natural gas which does not contain regulations for the gas sector," Roussef said. More than 90% of Brazil's electricity comes from hydro plants.

To meet increasing gas demand, the minister counts on increased production from recent discoveries. Last year Petrobras discovered 420 billion cu m of gas in the Santos basin, which tripled Brazil's gas reserves. The minister expects production start from that basin in January 2009.

According to Roussef, the $1 billion development of Mexilhão field, on Block BS-400 in the Santos basin off São Paulo state, will begin in 2008. The exploratory phase includes the drilling of seven wells with investments of $109 million.

For the development of Block BS-500, also in the Santos basin, Rousseff expects production start-up in June 2009 after the drilling of nine wells.

Petrobras's strategic plan forecasts a growth rate of 14.2%/year for natural gas consumption during 2004-10, including exports.

During this period, the company will invest $6.1 billion in gas and electric power, of which $3.9 billion will be allocated exclusively to Brazilian gas projects.