Brazil’s Sergipe state granted a tax discount to pipeline company TAG to build a 25km (15.5-mile) line that will connect the Barra dos Coqueiros’ LNG terminal to the natural gas grid.

Flávia Pierry, Argus

RIO
EnergiesNet.com 02 07 2023

The decision was made by Sergipe’s industrial development council and issued on 2 February. The company will have to pay 6.2pc of the total ICMS tax to build the pipelines, a 93.8pc discount.

The discount on the value added-type tax will reduce gas transportation costs for future consumers that buy gas from the terminal, according to Sergipe’s state government. TAG expects the pipeline to start operation in 2024.

The terminal has an installed capacity of 21mn m³/d, and the regional gas-fired power generator Porto de Sergipe demands 6mn m³/d when generating. The connection pipeline will have a 14mn m³/d capacity, feeding into TAG’s grid, with 4,500km of pipelines in 10 states and 90 delivery points.

Marcelo Menezes, executive-secretary at Sergipe’s industrial and economic development department, says that the state will attract a “significant portion of Brazil’s LNG imports”. The terminal has a 25-year contract to supply gas to the Porto de Sergipe thermal powerplant that already pays for the terminal investments. He considers that the price of Sergipe’s LNG will be more attractive than the gas imported from other terminals.

argusmedia.com 02 06 2023