Five industrial segments receive priority access under the CNPE resolution issued in July 2026: chemical and petrochemical, fertilizers, steel and metallurgy with mining, ceramics, and glass. The total contract volume divides equally among these sectors in the first bidding round. Contracts not awarded to priority buyers move to a second round where both the per-company cap and the sector distribution can be waived. Any remaining volumes then open to all industrial free consumers before becoming available to the broader market including distributors and traders.
The commercial structure emerged from a three-year agreement signed September 10 between PPSA and Petrobras. Under the arrangement, PPSA sells raw gas to Petrobras, which provides extraction via subsea pipelines and processing at natural gas processing units. Petrobras then resells processed gas to PPSA at the transport system exit point under pre-agreed pricing. This structure establishes the auction’s reserve price below current market references, which the ministry estimates at approximately $12 per million BTU. Government projections suggest final auction prices could reach $5 per million BTU, representing a reduction exceeding 50 percent.
The logistics arrangement resolves operational constraints that had blocked previous auction attempts, as PPSA lacks direct access to processing and transport infrastructure. Petrobras controls the dominant share of Brazil’s gas infrastructure, making its participation essential for physical delivery. The standardized contract format and priority sector targeting aim to unlock dormant industrial demand, particularly among energy-intensive manufacturers that have avoided gas commitments due to historical price levels. Deliveries from the October auction extend through December 2027, with annual auctions planned for subsequent years and provision for additional extraordinary sales within the same calendar year.
This article was curated and published as part of our South American energy market coverage.
