Rio Approaches Investors for US$2bn Gas Complex

The government of Brazil's Rio de Janeiro state is contacting companies to construct a natural gas industrial complex at the port of Sepetiba, a state government official told BNamericas.

Possible investors that have been contacted are Norway's state-owned oil company Statoil, Brazil's federal energy company Petrobras, the local division of US energy company El Paso, local petrochemical group Rio Polymers, said Wagner Victor, head of Rio de Janeiro's state energy, shipbuilding and oil secretary.

"The preliminary cost of the project is US$2bn," he said. The capacity of the complex has not been determined. "We initially want to build liquefied natural gas (LNG) plant to give it scale," Victor said, who added that capacity could increase if a petrochemical facility were included for producing ethane, methane, ammonia, and polymers. The goal of the joint venture, formulated by the Rio de Janeiro state government, is to take advantage of 700 million cubic meters of natural gas reserves that are currently being flared or reinjected into wells operated by Petrobras. The federal oil giant also discovered 420 billion cubic meters of natural gas in wells that lie off the coast between Sao Paulo and Rio de Janeiro states.

"Septiba offers advantages since it is a developed port complex with lots of available land. Petrobras has land available at the port for its PetroRio petrochemical hub that was never developed," Victor said. The LNG produced at the unit would be exported to the US.

Plans to include El Paso and Statoil, both US gas distributors, would guarantee access to the US market for Petrobras gas.

The state secretary said that a final project should be outlined by next year and that construction would take up to five years. "It is a very feasible project," he said. A Norwegian trade delegation headed by the country's royal family arrived in Brazil Monday. The delegation includes oil and energy minister Einar Steensnaes, trade and industry minister Ansgar Gabrielsen, environment minister Borge Brende, fishing minister Sven Ludvigsen and foreign minister Jan Petersen. Norway's Queen Sonja will attend the launch October 10 of the Norskan Leblon support ship for Norwegian company Stolt Offshore at Rio shipyard Promar.

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