Petrobras to Supply Natural Gas to Steel Giant Ternium

Petroleo Brasileiro S.A. (Petrobras) is partnering with steel producer Ternium to supply natural gas to the latter’s plant in Rio de Janeiro.

The agreement marks Ternium's migration from the captive market to the free market in Rio de Janeiro, where it relies on a firm supply of natural gas provided by Petrobras, according to a recent news release. The two companies are “betting on developing solutions to enable Brazil's open, competitive, transparent, sustainable, and ever-growing trading environment,” Petrobras said.

The two companies also intend to develop other business partnerships and synergies concerning the natural gas segment, according to the release.

"Petrobras and Ternium have important synergies, and the natural gas market is an essential link between them. As to the current market opening context, the new Natural Gas product portfolio provides a diversified range of contracts in a more competitive environment. We are always working at being our business partners' best supply option," Maurício Tolmasquim, Petrobras Energy Transition and Sustainability Director, said.

"This agreement will open up great opportunities for Ternium Brasil. The possibility of acquiring natural gas in the free market makes for higher competitiveness, enabling more effective resource management. This factor enhances processes and stimulates steel decarbonization—a strategic agenda for us," Titus Schaar, Ternium Brasil President, said.

Ternium describes itself as one of the top steel producers in Latin America. Its industrial plant in Santa Cruz, Rio de Janeiro, has an output capacity of five million tons of steel plates per year, supplying industries in the USA, Mexico, Brazil, and Europe.

Colombia Gas Discovery Update

Meanwhile, Petrobras said that the gas potential in the recent discoveries in Colombia’s Guajira Offshore Basin is around 6 trillion cubic feet in place, “confirming the magnitude of the discoveries made in the area and its importance for the Colombian gas market”.

Petrobras is the operator of the asset with a working interest of 44.44 percent, while Ecopetrol holds the remaining working interest of 55.56 percent. The consortium will continue operations to develop the area, in accordance with planning and contractual forecasts with the National Hydrocarbons Agency (ANH), according to a separate news release.

“The commercial viability of the reserve will require further studies,” Petrobras said.

In August, Petrobras said its Uchuva-2 well confirmed the discovery it made in 2022 with the Uchuva-1 well, adding that the well “adds relevant information for the development of a new frontier of exploration and production in Colombia, reinforcing the volumetric potential for gas in the region”.

The Uchuva-2 well, which was spudded in June, is located in deep waters in Colombia, 19 miles (31 kilometers) off the coast and at a water depth of 2,638 feet (804 meters). In its planned development of five phases, the gas-bearing interval was verified in the fourth phase through wireline logging, which will be further characterized through laboratory analyses, Petrobras said.

The Uchuva-1 and Uchuva-2 wells have been renamed Sirius-1 and Sirius-2, respectively.

Petrobras earlier stated that its operations in the Tayrona Block are in line with its long-term strategy, aimed at replenishing oil and gas reserves through the exploration of new frontiers and acting in partnership, “ensuring that global energy demand is met during the energy transition”.

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