Brazil to Unveil New Gas Legislation in 2005

Brazil's mines and energy ministry expects to unveil next year a bill to regulate the natural gas market as its experts have concluded the simulation of a secondary gas market in the country, a ministry spokesperson told BNamericas.

The ministry had previously announced that the bill could be unveiled in November.

"Simulations and studies have to be made to see how this works," the official said.

A specific gas bill is considered important by gas companies to set rules and guidelines for the transport and sale of gas as well as to determine the role of the players in the market, especially of federal energy company Petrobras that has control of the largest gas reserves in Brazil and of the country's 4,000km gas pipeline transport network.

The government is however drawing up a bill that includes the creation of a secondary natural gas market, allowing gas-fired power generators to reduce their losses by allowing them to sell to industries the gas they are not using for generation.

Gas-fired generators account for a small percentage of Brazil's 87,000MW installed capacity. Because their generation is more expensive than hydroelectric power, they are normally only asked to supply power to the national grid operator ONS in small amounts or when reservoirs at hydro plants are at low levels. Government officials have said that time is needed to reach a consensus and build up support for the new legislation.

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