January 23, 2021

Petrobras Seals Natural Gas Transportation & Processing Deal

Petroleo Brasileiro S.A. or Petrobras PBR recently inked a deal with the partners in the Santos Basin pre-salt offshore gas pipelines,namely Petrogal Brasil, Repsol REPYY and Sinopec’s SNP local joint venture Repsol Sinopec Brasil and Royal Dutch Shell’s RDS.A Brazilian unit Shell Brasil forsharing natural gas transportation and processing infrastructures.

The deal includes provision for the interconnection and sharing of transportation volumes on routes 1, 2, and 3, resulting in the Integrated Natural Gas Transportation System (SIE). Apart from the SIE, contract provisions comprise the Integrated Natural Gas Processing System (SIP), which includes Petrobras’ access to its processing units, which it runs in Caraguatatuba, São Paulo, and Cabiúnas and Itaboraí (under construction), the last two located in Rio de Janeiro.

The union of SIE and SIP is a vital move by the private companies to allow them to sell their volumes of natural gas directly to their clients. The natural gas transportation and processing agreement will also intensify the competitive landscape and restrict Petrobras’ involvement in all aspects of the natural gas chain per the terms of the company’s deal with Brazil’s Administrative Council of Economic Defense, inked in July last year.

Company Profile

The currently Zacks Rank #3 (Hold) Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. The company’s activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks. The operations also include refining, processing, trading and transportation of oil and oil products plus natural gas and other fluid hydrocarbons besides other energy-related operations. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Petroleo Brasileiro S.A. Petrobras (PBR): Free Stock Analysis Report

China Petroleum Chemical Corporation (SNP): Free Stock Analysis Report

Royal Dutch Shell PLC (RDS.A): Free Stock Analysis Report

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