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Midstream Regulation in Brazil: Main Issues in Pipeline Natural Gas System

  • Hirdan K. M. Costa
  • Thiago L. F. BritoEmail author
  • Raul P. Pinto
  • E. Moutinho dos Santos
Chapter

Abstract

Historically, countries have been carrying out structural reforms in the natural gas industry, trying to ensure a fair price through efficiency and economic rationality as well as introducing competition. In this chapter, we discussed two main issues in pipeline natural gas system: pipeline pricing and open access rules to third parties. This approach is based on a literature review as well as on the regulatory framework. Regarding pipeline pricing, Brazil currently adopts the postal price methodology related to the services of the transport activity, which lacks rationality and economic efficiency in allocating costs among consumers and impacts the process of expanding investments in the gas pipeline network. Our analysis showed that price subsidies granted to the Brazilian gas cause changes in the competitive advantages among the consumer markets in the different regions of Brazil, besides impacting the democratization in the supply of the energy input and interfere in the decisions of allocating investments of potential consumers in the natural gas market. It concluded that the information transparency and the changes on tariff regulation should increase the development of infrastructure, competition as well as fair natural gas price. Related to open access rules to third parties, the Petroleum Law was not able to promote a competitive environment. First, because there was not tariff system defined. Second, the transporter could exercise vertical integration. However, the Natural Gas Law have tried to move forward from the vertical integration to a competitive market. In addition, the new proposal of Directive, currently in discussion, has a clear perspective to increase the availability of operational and contractual information on the transport of natural gas. Thus, the perspective regarding open access to third parties is still in a positive management by ANP. Of course, the third parties, mainly, Carriers need to wait that new Directive to be enact in those terms.

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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  • Hirdan K. M. Costa
    • 1
  • Thiago L. F. Brito
    • 1
    Email author
  • Raul P. Pinto
    • 1
  • E. Moutinho dos Santos
    • 1
  1. 1.Institute of Energy and EnvironmentUniversity of Sao PauloSao PauloBrazil

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