Petrobras closes billion-dollar deal to buy US gas for 22 years
Petrobras signs contract to purchase 800,000 tons of gas from the US annually for 22 years. Learn about the details of the agreement.
Petrobras has agreed to buy gas from Estados Unidos for 22 years, expanding the Brazilian state’s strategy to ensure the supply of natural gas through long-term contracts. The deal was announced on Tuesday and provides for the annual acquisition of 800,000 tons of Liquefied Natural Gas (LNG).
The contract was signed with Cheniere Marketing, a subsidiary of the American Cheniere Energy, considered one of the main producers and exporters of LNG for the Estados Unidos.
Contract seeks to reduce price oscillations
According to Petrobras, the contracting of gas volumes for longer periods is part of a strategy to reduce the company’s exposure to variations in the so-called spot market, in which purchases are made for short-term deliveries and are more subject to price fluctuations.
The new agreement also aims to strengthen the risk management of the natural gas portfolio and expand the flexibility to meet the contracts held by the company.
How the gas will be transported
The negotiated gas will be supplied in the form of Liquefied Natural Gas (LNG). In this process, the gas is cooled to the liquid state, significantly reducing its volume and allowing transport on ships.
According to Agência Brasil, when converted into liquid, the gas takes up about 600 times less space. In this way, the product can be transported between countries without the need for a direct connection by gas pipelines.
In Brazil, natural gas is used in different sectors of the economy, including power generation in thermal power plants, industrial activities and residential consumption.
Petrobras had already concluded another deal in the US
The new contract is the second long-term deal involving U.S. gas announced by Petrobras in about a month.
At the end of August, the company also signed a contract with Sempra Infrastructure to purchase another 800,000 tons of LNG per year for 20 years.
In that case, the fuel should be supplied by the LNG Liquefaction Terminal in Port Arthur, Texas.
Cheniere Energy, responsible for the new supply, maintains operations at large liquefaction terminals on the Estados Unidos, including Sabine Pass in Louisiana, and Corpus Christi in Texas.
