Petrobras Signs LNG Purchase Agreement with Nigeria

Represented by its Gas & Energy director, Ildo Sauer, Petrobras has signed a master agreement with Nigerian LNG for the provision of liquefied natural gas (LNG). The event was held in Barcelona, Spain. The agreement lays down all negotiation conditions the companies will comply with when Petrobras has demand for LNG. In addition to the agreement with the Nigerian company, Petrobras also signed a confidentiality agreement with Oman LNG for potential product supply negotiations.

Petrobras' Gas & Energy director spoke about the company's initiatives in this area during a press conference held during the 15th International Conference & Exhibition on Liquefied Natural Gas (LNG 15), the sector's biggest event. Sauer explained the negotiations held with Norwegian corporation Golar to charter vessels to supply gas to the Liquefied Natural Gas (LNG) terminals in Rio de Janeiro and Ceara, and detailed the agreement signed with the Nigerian company. This negotiation will guarantee the supply of the vessels chartered from Golar.

The first vessel is expected to start transporting LNG in April 2008, while the second in the first quarter 2009. Ildo Sauer says Petrobras is also analyzing hiring one more vessel. "When in operation, they will add another 20 to 21 million cubic meters per day to the domestic gas supply. A third vessel may bring another 14 million cubic meters per day.

Sauer highlighted the LNG agreements' flexibility: "This flexible source of natural gas may supply half of our thermoelectric plants. This is better than paying for production capacity via take or pay-type agreements. You have temporary fixed costs while hydroelectric plants are affected by the dry season, instead of permanent ones."