Petrobras presents a short-term natural gas contracting model
via electronic auctions

31/3/2009

Petrobras is presenting to the market a new contractual mode to market natural gas to local distributors. Volumes of natural gas will be offered in short-term agreements signed via electronic auctions. The first auction is scheduled for April 15. These trade agreements will involve volumes for consumption in up to two months, within the gas delivery availability limit, and at competitive prices compared to those of fuel oil.

Unlike the existing trade agreements, the new contractual modes will have shorter delivery terms and pre-defined durations. The amount charged for the natural gas will be set in highest bid auctions.

State distributors with which Petrobras has long-term agreements can participate in these auctions. The volumes of natural gas foreseen by the existing agreements with the distributors and which are currently not being marketed by these companies to their final consumers, will be offered.

The volumes to be marketed in the auctions will not threat the supply to the thermoelectric market in the event the plants need to step-up electric energy generation when ordered to do so by the National Electric System Operator (NSO).

In each auction, lots of natural gas volumes defined by sub-markets in the natural gas marketing environment will be negotiated. The volumes of natural gas marketed in the auctions will be delivered in the first and/or second month after the sale is made.

The auctions will be held electronically through a virtual platform developed especially for this model of negotiation. The entire process can be audited and will be followed-up on by an independent auditor Petrobras will hire.

Petrobras presented this new contractual model to representatives of all distribution companies today, during a meeting held at its main office building, in Rio de Janeiro.

Next Friday (4/3), Petrobras will divulge a meeting notice, which will detail all participation conditions and operation rules.

By means of this new short-term natural gas contracting model, Petrobras responds to the market’s wishes to balance the supply and demand in the non-thermal segment focusing on the final consumer.

Petrobras press release