Compass Infrastructure

The gas and energy market is going through a major transition, with increasing supply and competitiveness offering a variety of infrastructure investment opportunities. In the natural gas sector, offshore pre-salt proven reserves will allow domestic production to double in 10 years. Natural gas is the cleanest among all fossil fuels and its use is crucial for a low-carbon energy mix. Today, natural gas accounts for only 10% of Brazil’s energy matrix. Investments in pipelines will bring natural gas from offshore pre-salt fields to the shore enabling this share to increase. Additionally, we see investment opportunities in Liquefied Natural Gas (LNG) regasification terminals, with LNG imported from the world’s main producing regions and transported overseas in cryogenic vessels.

TRSP – Terminal de Regaseificação de GNL de São Paulo
(São Paulo LNG Regasification Terminal)

TRSP will be located at the Port of Santos, with a licensed nominal regasification capacity of 14 million m³/day, storage of 150,000 m³, and an approximate investment of R$670 million. Since 2015, the terminal has been analyzed, and in 2019, a previous license for the project was obtained. The issue of installation license is expected for 2020 and subsequently, the start of civil works. The TRSP shall be administered by Compass, and operations startup is estimated for the first quarter of 2022, in a chartering model of the Floating Storage Regasification Unit (“FSRU”), a vessel specialized in the Liquefied Natural Gas (LNG) regasification.

The project will be remunerated by regasification, allowing the State of São Paulo to access the international gas at competitive prices, creating a relevant supply alternative and flexibility in line with our strategy of diversifying supply to the market and maximizing competitiveness.

Route 4

The Route 4 has also been developed, connecting the production wells of the Santos Basin to the continent, where a Natural Gas Processing Unit will be built (UPGN). As published by the Energy Research Company (“EPE”), this project has two alternatives, the Route 4a, connected to the city of Cubatão (SP), and the Route 4b, connected to the Port of Itaguaí (RJ). The licensed capacity is 21 million m³/day and an approximate investment of US$2 billion as from 2024 to be developed jointly with strategic partners, and Compass holding a non-controlling interest. This investment has been analyzed since 2012, the previous license is estimated for 2020, and the installation license in 2021. Operations should initiate in 2027 and the project will be remunerated by natural gas outflow and processing, by a probable tolling model, signing contracts with producers, trading companies, or gas distributors. The Route 4 should allow access to the competitive pre-salt gas, also a relevant step in our supply diversification strategy.

The TRSP and Route 4 are strategically ancillary, as they have different supply profiles and flexibility and high value to compose our portfolio. The expected pre-salt gas production associated with oil should see a firm demand so that the operation is not disrupted. The LNG import allows us to maximize supply flexibility, enabling us to better manage fluctuations and market demand opportunities. This segment focuses on originating competitive natural gas from different sources through infrastructure and offering it through the gas trading segment to the consumer market, free-market clients in general, and thermal power plants.

Last update: September 8, 2020