Brazil’s Alagoas state to attract industry with gas

Brazil’s Alagoas state to attract industry with gas

Brazil's Alagoas state to attract industry with gas

Sao Paulo, 7 April (Argus) — The new Brazilian gas market and state-run Petrobras' divestment process are helping the state of Alagoas in its strategy to increase oil and gas production and lure industries interested in less-expensive gas.

Alagoas also seeks to expand its gas distribution grid, aiming for residential gas consumption to displace LPG service in vessels, Alagoas economy secretary George Santoro told Argus. This would help local distribution company Algas maintain revenue as large industrial gas consumers shift to bilateral gas supply agreements.

Alagoas is updating state laws to address the gas distribution business under the open markets, which Santoro expects to be fully approved by June. The state is also empowering its local regulatory agency to better deal with gas issues, which includes hiring more workers.

There are other challenges the Brazilian gas market changes bring for the states Santoro said, including the high transportation tariffs for Northeastern states and the need for a tool to measure gas movement volumes from one state to another, which will be key for collecting state taxes.

Alagoas, located in the northeastern coastal region, was one of the first states in Brazil with active oil production in the