Written by: Islam Al-Saqqa
The Brazilian state-owned petroleum company (PPSA) has conducted its first auction to sell natural gas directly to end consumers, offering 110 lots that were fully subscribed, with a total volume of 1.1 million cubic meters per day.
Major Companies Win Lots
The list of winners included leading companies in the mining, steel, and petrochemical sectors, including Vale, CSN, Gerdau, Braskem, Samarco, Ternium Brasil, Evonik, and Ingredion. These sectors are among the largest consumers of gas and rely on reliable supplies for their energy-intensive production operations.
A Historic Milestone for Brazil
Brazilian Minister of Mines and Energy, Alexandre Silveira, described the auction as "historic for Brazil," noting that the government has never before engaged in the direct sale of state-owned gas to end consumers in this manner.
Expected Revenues of 376 Million Reais
The head of PPSA announced that the institution expects revenues of 376 million Brazilian reais (approximately 74.6 million US dollars) during the ten-month period covered by the auction supplies. This direct sale provides major industrial companies with access to government gas without intermediaries.
German Interest via Evonik's Participation
The participation of the German specialty chemicals company Evonik, based in Essen, holds particular significance for German investors, as it secured gas supplies for its activities in Brazil. Furthermore, Vale and Gerdau are globally recognized names in the raw materials and steel markets. The full subscription of all 110 lots reflects the Brazilian industry's bet on predictable long-term energy prices.
