Natural gas: Creating wealth for Brazil

Nat ural gas: Creating for Brazil wealt h

Brazil aims to expand the important role that natural gas plays in the country’s energy matrix.

By José Carlos Broisler Oliver

The natural gas industry is currently one of Brazil’s most promising with significant development potential due to certain key factors.

First is the intermittent nature of solar and wind renewable energy, given that solar energy cannot be generated during the night and winds are abundant in certain regions, but not constant. Therefore, the country needs a source of energy not only for its transition to renewables, but also for stabilising its energy system. And that is where natural gas comes in as a solution. In the future, we foresee an energy profile based heavily on renewable energy sources, but with natural gas playing a significant role in complementing power generation, as already is the case in other countries, such as Germany, Japan, Spain and the United States. The other energy alternative, hydropower, which accounted for 65% of the nation’s electricity supply in 2017, is insufficient to meet demand, given the periods of low reservoir levels. Furthermore, no major projects are currently planned for this energy source, given the saturation of this power generation segment.

Brazil has abundant natural gas resources. (above) This FPSO platform in the Lula Extreme South area of the Santos Basin processes oil and gas. (opposite above) This marine seismic vessel is prospecting for new resources in the Campos Basin.

Second, Brazil has an abundant supply of natural gas. Brazilian natural gas reserves currently amount to approximately 500 bcm, which gives the country the second largest conventional reserves in Latin America, although Argentina might surpass that considering its extensive unconventional resources. In 2017, Brazil’s natural gas consumption was 104.9 mcm/day, with this figure expected to grow over the coming years. In first place is Venezuela, which has the largest proven gas reserves by a significant margin.

Furthermore, the expected gradual recovery in Brazil’s economy in the coming years supports projections of natural gas reaching a share of at least 15.5% in the country’s energy matrix by 2030, according to data from the IGU Charter Member for Brazil, the Brazilian Association of Piped Gas Distributors (Abegás).

Although this potential share of natural gas in the country’s energy profile is still far below the level worldwide, it would represent a highly favourable scenario if it were to materialise, with the industry likely thousands of jobs and increasing federal tax receipts, among other potential benefits for our economy. For now, there is still much to be done.

Brazil’s largest distributor

At Comgás, Brazil’s largest natural gas distributor, we have been working tirelessly to deliver natural gas to more and more people, while highlighting its environmental, economic, social and technological benefits. With uninterrupted supply and 24/7 service, we supply natural gas to over 1.8 million consumers in the industrial, commercial, residential and automotive segments, while developing cogeneration

projects and supplying gas to thermal power plants.

Our commitment goes beyond supplying piped natural gas. We work to be the best energy alternative for people, companies and society by offering services and solutions that

São Paulo-based Comgás is Brazil’s largest natural gas distributor – above one of the company’s city gate connections with the transmission network and overleaf Comgás employees checking a gas meter.

anticipate the future. After all, supplying energy represents joining forces to move people, companies and an entire country towards a better future.

Today, our distribution network of 16,000 km serves 88 cities in the company's concession area, which includes the São Paulo metropolitan area, the Campinas administrative region, the Baixada Santista region and the Vale do Paraíba region. Together, these areas account for 26% of Brazil’s GDP and 30% of the natural gas distributed in Brazil. And there is still much to be done. In our concession area, we have the potential to connect nearly 8 million homes, commercial establishments or manufacturers over the coming years.

And to continue expanding our network, we have defined some priority fronts, which include customer satisfaction, the continuous pursuit of operational excellence and investments in business intelligence and innovation to expand our infrastructure sustainably.

In customer experience, in recent years we have invested in technological solutions to improve continually our relationship platforms via new digital technology fronts, becoming more proactive in our interactions with consumers, especially on social media. We also are working on various initiatives to promote a culture of gas by developing new solutions that offer greater comfort, convenience and safety for our customers.

In terms of operating efficiency, we have, for example, initiatives to develop new processes for building gas networks, the use of sensors to monitor assets (Internet of things) to improve the monitoring, control and safety of our infrastructure and the growing use of mobility tools for managing our sales force and operational teams in the field.

On the business intelligence front, we have been investing more in analysing consumption profiles to plan better our infrastructure growth and to segment more effectively the value proposition for our various customer profiles, as well as in various analytical dashboards for managing our operations. In 2017 alone, we invested over $10 million in IT, innovation and R&D projects, which is a significant amount for a distributor.

All these initiatives take into account safety, which remains a non-negotiable value for us. Our motto is zero injuries and high performance, which guides the company’s priorities in its management of risks and its focus on the safety of our workers (employees or contractors), clients and the general public. Our culture is translated into practices and disseminated by all areas through rules and procedures. One example is the policy on health, safety, environment and asset integrity, applicable to all employees, suppliers, contractors and stakeholders, which ensures our commitment to the execution of our activities.

In this way, we hope to contribute to increasing the importance of this strategic input for Brazil and to expanding its use in homes, vehicles, office buildings, shopping malls, hospitals, hotels, airports, factories, etc., to put Brazil on a par with other countries and to take advantage of the abundance of this natural resource in our country.

José Carlos Broisler Oliver is Projects and Gas Supply Director at Comgás (www.comgas.com.br) and the Chair of IGU’s Distribution Committee.