Brazil New Gas Law Policy Brief

3 BRAZIL ’ S NEW GAS LAW

INSTITUTE OF THE AMERICAS POLICY BRIEF

The new law also regulates natural gas storage, which had not been fully covered in previous regulations but was sought by the oil and gas industry. It also grants ANP the authority on import and export activities. With regards to natural gas commercialization, the new law brings the standardization of trading contracts, harmonization of state and federal regulations, which includes the regulation of the free consumer. Prior to the Law, consumers had to acquire natural gas from state distribution companies, and now they can acquire directly from any agent qualified to exercise commercialization of natural gas activities. Consumers whose necessities are not met by state distribution companies are allowed to build their own facilities and pipelines, which are to be operated by the state distribution companies. The role of Petrobras in the new gas market Prior to the Gas Law, the public organization responsible for the promotion of free competition (CADE) imposed on Petrobras a Term of Termination of Conduct (TTC), where the company agreed to sell all its assets in the transport and distribution segments in an

effort to de-verticalize its dominant position in the natural gas sector.

Photo: By Travel mania/Shutterstock

In order to comply with the terms of the TTC, Petrobras intensified the sale of assets in the natural gas sector. The company has sold most of its transport assets, including 100% of its stake in TAG (Transportadora Associada de Gás), its main transport company. The company has also started the process to sell its stake in Transportadora Gasoduto Bolivia-Brasil (TBG), responsible for the gas imported from Bolivia. Petrobras has also initiated the process of selling Gaspetro, a subsidiary that holds equity interest in 19 of the 27 Local Distribution Companies in the country.

April, 2021