LONDON, Feb 25 (Reuters) - Britain’s Centrica chartered a vessel to supply liquefied natural gas (LNG) this month to power firm Centrais Elétricas de Sergipe S.A. (CELSE) , launching Brazil’s first private LNG terminal.
Brazil has been implementing reforms to end the monopoly of Petroleo Brasileiro SA, known as Petrobras, in supplying natural gas to the domestic market. The new terminal was developed before the reforms were announced last year.
The Singapore Energy tanker delivered a 95,000 cubic metre cargo to the terminal on Feb. 4, performing a ship-to-ship transfer to the Golar Nanook Floating Storage and Regasification Unit (FSRU) located 8.5 km (5.3 miles) off the coast of Brazil, Centrica said in a statement on Tuesday.
The new FRSU is connected by pipeline to CELSE’s Usina Termoelétrica (UTE) Porto de Sergipe I combined-cycle gas-fired power plant, the largest in Latin America.
“This cargo represents another milestone for the Brazil LNG market and demonstrates Centrica’s growing global LNG trading, optimisation and operations capability,” said Jonathan Westby, Centrica’s global LNG head and co-managing director of marketing and trading.
Brazil’s LNG imports rose 19% to 2.61 million tonnes in 2019 compared to 2018, Refinitiv data showed. Brazil imported 5 million tonnes of LNG in 2015.
The country’s terminals have operated below capacity because of lower domestic demand, increased domestic production and the need to curb foreign exchange spending.
Three other regasification terminals in Brazil were operated by Petrobras, which said last year it would lease its LNG regasification terminal and an associated gas pipeline in the northeastern state of Bahia.
Petrobras has been importing only spot LNG cargoes, with no long-term contracts, an LNG trader said.
There have been no imports into the Guanabara Bay terminal since 2018.
Brazil relies for most of its gas supplies on domestic output. Alongside LNG, it also imports gas from Bolivia via pipeline. (Reporting by Ekaterina Kravtsova; Editing by Edmund Blair)
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.