Brazil New Gas Law Policy Brief



have links with the carrier. Therefore, the law intends to create independence between the chains of the gas industry, in a way that new players are not inhibited by verticalization of activities and establishment of natural monopolies. The gas law also grants ANP authority to adopt mechanisms that reduce supply centralization, such as bidding rounds for exploration areas, transferring of transport capacity, and measures that may require agents to offer more natural gas in order to stimulate competition. There are several changes in the transport sector too. The new law simplifies the framework of transport activities, changing from a concession regime to authorization regime, where ANP is responsible for authorizing construction of new pipelines. If there is more than one carrier interested, ANP shall conduct a public bidding process to determine the most advantageous project to society. The law also grants third party access to gas essential infrastructure such as pipelines, natural gas processing units and LNG terminals. Another important aspect in the law is the new contractual model for contracting pipeline capacity, which includes the establishment of an entry and exit model for transport activities, where either could be contracted independently of each other.

Photo: "LNG Carrier" by HerryLawford is licensed under CC BY

The new gas law seeks to facilitate this process through four pillars: promoting the entrance of new players, making the transport sector attractive to new players, fostering competitiveness in natural gas trading, and reducing the price of natural gas to consumers. With regards to decentralization and entrance of new players, the new law brings the concept of market unbundling by preventing companies that operate in E&P, import or commercialization of natural gas to participate in transport and distribution activities. It also prohibits companies that contract transport to

April, 2021

Made with FlippingBook - professional solution for displaying marketing and sales documents online