Players Evaluate Brazil Gas Demand As Future Of Biogas

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Energy industry members evaluated the development of natural gas demand and the future of biogas during panels at Argus’ Brazil Gás Commercialization Forum in Rio de Janeiro, says a press release on Argus website.

Industry expand

Natural gas prices must be more attractive in order for the industry to expand, said Roberto Noronha Santos, chief executive of petrochemicals group Unigel. 

He said this would lead investors to increase production, which would promote other investments such as in infrastructure. 

He highlighted the need for local industries to be able to compete with international companies in the country, on the same playing field in terms of incentives.

Fraud accusation

There is a need for players to engage in the opening of the market, gas distributor Potigás’ chief executive Marina Senna said. 

She recalled an example from Rio Grande do Norte state where market participants and the regulator were able to expand the sector without a lot of legislative interference.

The taxation system must adapt to the realities of the market, said Rodrigo Senne, natural gas director at Ambar Energia. 

He cited the swap mechanism, where a contracted molecule is delivered from a supplier in a different place than originally stated in the contract, which can result in a tax fraud accusation.

Non-associated production

Producer Origem Energia’s oil and gas trading director Gustavo Hooper talked about the company’s success in developing the market in Alagoas state. 

Zero emissions

He said that from Origem’s perspective non-associated production is offering the level of stability the market needs.

Participants also discussed the challenges, risks and opportunities of the biogas market. Gabriel Kropsch, a partner at gas trading company Sinergas, highlighted the climatic urgency the world faces, and pointed out biogas is the only primary energy source with a negative carbon footprint, making it indispensable for companies that want to reach net zero emissions.

Price to determine

Natalia Cerqueira, who is the gas and renewable natural gas originator manager at Raízen, said the price of natural gas will be the price the client is willing to pay — if it covers the investment and is competitive for the supplier. 

Some consumers do not understand the dynamics of the international market and ask for more predictability, she said. She also said it is hard to say how long indexing biogas to the national inflation rate, which keeps climbing, will be sustainable.

Producer MDC’s chief executive, Manuela Larangeira Kayath, said to consider factors other than price to determine the competitiveness of biomethane. 

She named the revenue from carbon credits, Cbio credits and others as components that can make biogas attractive.

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Source: Argus Media

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