The natural gas market in Brazil has undergone significant changes since the approval of the new Gas Law in 2021, shifting from a vertically-integrated structure, dominated by an incumbent company, to a more competitive environment with an increasing number of players.
Regulatory reforms, which imposed the unbundling of the regulated and competitive parts of the industry, regulated third-party access in transportation, negotiated third-party access to essential facilities, implementation of entry and exit tariff model, to name a few, have stimulated greater diversity and competition in natural gas supply.
Since 2021, the Brazilian gas market has seen a gradual increase in the number of natural gas producers who sell their gas directly to distribution companies and final unregulated consumers. The diversification of domestic gas suppliers, combined with the development of new LNG regasification terminals, is expected to further diversify of natural gas supply in Brazil.
Overall, the transformation of the natural gas market in Brazil is driven by regulatory reforms and infrastructure investment, leading to a more diversified natural gas market.
This paper will substantiate this trend of increased diversification of gas supply and will demonstrate how these changes are reshaping business models and contractual arrangements between suppliers and buyers, benefiting consumers through more diverse contractual arrangements with greater flexibility and more competitive prices.
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