Brazilian lawmakers approve gas unbundling bill

Brazil's lower house of congress has approved legislation aimed at promoting competition by preventing companies that produce gas, namely state-owned Petrobras, from also controlling gas transport operations.

The bill, which will need to be signed into law by Brazilian president Jair Bolsonaro, will also change the legal framework for gas distribution from a regime of concessions to a simpler authorisation process, in order to reduce the bureaucracy involved in building pipelines. In addition, it facilitates third-party access to pipelines, gas processing capacity and regasification terminals.

Brazil's upper house of parliament, the Federal Senate, approved the basic text of the bill in December last year. It was then sent back to the lower house, the Chamber of Deputies, for further amendments. The chamber notably rejected an amendment made by the Senate that would have allowed companies that had been authorised to build new pipelines but had not yet begun construction to maintain their concessions.

Petrobras has already scaled back its activities in gas transportation through several divestments, including the sale of a 10% stake in the country's largest gas pipeline company TAG to France's Engie and Canadian investment fund Caisse de Depot and Placement du Quebec last year for $190mn.

The government projects that the gas sector will receive some BRL60bn ($10.6bn) in investment over the next five years thanks to the new law.