The “New Gas Law” is approved by the Plenary of the House of Representatives
The Bill nº 6.407/13, better known as the New Gas Law, was approved on September 1st, 2020, by Plenary of the House of Representatives. The text was approved by majority, with 351 votes against 101, without amendments to the text of the last substitute approved by the Mines and Energy Commission of the House of Representatives. As of today, the Bill will proceed to the scrutiny of the Federal Senate.
The approved text represents the consensus so far possible among industry players and will enable further market opening of the Brazilian gas market, fostering competition and investment for the development of the sector. Among the changes brought by the approved text, the following should be noted:
- Licensing regime for gas transportation: the gas transportation licensing regime changed from concession to authorization, which should be preceded by a public hearing to be made by the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (“ANP”).
- Model for provision of transport services: the current model is the postal or point-to-point model, in which all the stretches of gas pipelines existing between the origin and the destination of the molecule are firmly contracted. The new model of entries and exits allows an independent hiring of an “entry” or an “exit” (selling or buying) of gas to the pipelines by agents, fostering greater flexibility to the transportation system.
- Third-party access to essential infrastructure (flow, processing and LNG terminals): currently, provision of access to essential infrastructure is optional by the relevant owners. According to the approved text, access shall be non-discriminatory and negotiated, ensuring priority access to the owner. This is one of the most important points to “open” the market, as it will provide to productors a much-needed access to existing essential infrastructure, increasing the overall availability of gas in the system.
- Complete unbundling of the gas market: the current law adopts the model of legal separation between the transport activity and the others in the sector chain. The Bill provides for the total unbundling of the industry, which is the separation under the legal, stockholding and functional aspects between carriers and other competitive agents of the sector. In this sense, there will be the inhibition of "Self-dealing" situations, among the industry agents.
- Commercialization model: the Bill provides for measures that will allow the registry of transactions for molecule commercialization in virtual hubs, through online platforms, by signing standard contracts, creating grounds for an organized market.
- Definition of commercializing agents: the Bill brings the definition of which agents that, upon authorization from ANP, can commercialize gas molecules, in addition to gas distributors.
The Oil, Gas & Offshore team is available in case of doubts.