Petrobras to Raise NatGas Supplies to 100Mm3/d by 2010

Brazil's federal energy company Petrobras (NYSE: PBR) plans to supply 100 million cubic meters of natural gas a day (Mm3/d) by 2010, the company's CEO José Gabrielli said in a seminar Tuesday.

The company currently supplies all the 36Mm3/d consumed in the country. Production is at some 45Mm3/d but a substantial volume is reinjected because of transport inadequacies.

The expansion of supply includes reaching the full 30Mm3/d transport capacity of the Bolivia-Brazil gas pipeline and the development of gas supplies in the Campos, Santos and Espírito Santo basins, Gabrielli said.

Apart from current projects, Gabrielli said there are several areas in these basins with high likelihood of having gas.

At the moment, however, Petrobras is concerned with the fast growth in demand for gas in Brazil.

"There is a short-term supply problem, since the expansion of production cannot keep up with demand," he said, without offering suggestions on how to solve the problem.

Gas usage in Brazil has been growing at 14% a year since 1998, and in 2004 it rose 19% from 2003.

"Everything points to similar growth this year," Gabrielli said.

Petrobras has set aside US$3.9bn through 2010 to expand transport and distribution networks to allow gas from the new production areas to reach markets in the country's southeast and northeast regions.

The company is however revising its strategic investment plan, which should be announced in coming weeks, Gabrielli said.