The Ministry of Mines and Energy (MME) has opened a five-day public consultation regarding the auction model for federal natural gas, scheduled for October, aimed at strengthening supply for core industries.
In a strategic move to optimize the use of natural gas extracted from pre-salt layers, the MME released a draft ordinance on Thursday, September 10, for public comment. The goal is to establish guidelines for the first federal gas auction, which will be conducted by Pré-Sal Petróleo SA (PPSA) to direct resources toward essential industrial sectors.
The initiative aims not only to ensure a more stable and competitive supply for the Brazilian industry but also to advance efforts to monetize the portion of gas belonging to the federal government. The deadline for contributions is short, ending next Tuesday, September 14, highlighting the ministry’s urgency to finalize the bidding process before the end of the year.
Boosting Core Industries
The MME proposal sets an ambitious schedule with annual auctions between 2026 and 2030, in accordance with Resolution No. 15/2026 from the National Energy Policy Council (CNPE). The first auction is already set for October 2026, with deliveries expected the following year.
Initially, competition for the gas will be exclusive to free consumers in specific core industry segments. This includes the chemical, petrochemical, fertilizer, steel, metallurgical, mining, ceramic, and glass sectors—all identified by their National Classification of Economic Activities (CNAE) codes—underscoring the focus on reindustrialization and national competitiveness.
Auction Structure and Procurement Limits
The draft details the sales structure, with volumes divided into contracts of 20,000 m³ of gas per day. For the first round, the total volume will be distributed equally among the qualified industrial sectors. Each company may secure a maximum of eight contracts, totaling 160,000 m³ per day, and can only participate in one sector.
Should any volumes remain unsold, new rounds will be opened, initially without participation limits for the core industry. Only after these stages will other energy market participants, such as traders and distributors, be able to access the gas at market prices. The strategy seeks to ensure off-take while prioritizing industrial strengthening.
The Ministry of Mines and Energy anticipates that the initiative will allow natural gas to be offered to industrial end-consumers at a significantly lower cost, potentially one-third of the prices currently seen in the market.
Commercialization and Infrastructure Challenges
Although PPSA‘s monthly production reached 398,000 m³ of gas per day in June, the proposal’s effectiveness faces historical infrastructure challenges. PPSA, without its own access to transport and processing systems, currently sells gas “at the wellhead,” which prevents its use for priority purposes and limits pricing negotiation power.
This scenario led the MME to evaluate the possibility of offering the fuel at much more competitive prices for the industry. However, the impasse regarding access to Petrobras‘ transport and processing infrastructure persists. This led the National Agency of Petroleum, Natural Gas and Biofuels (ANP) to establish a committee in July to unlock these negotiations, which are crucial for the realization of the auctions.
The successful execution of the federal gas auctions represents a fundamental step for Brazil’s energy policy, promising greater competitiveness for the industry and the optimization of a strategic pre-salt resource. With the public consultation closing soon, expectations turn to the coming weeks, awaiting the consolidation of the rules and the implementation of the auction in October. Overcoming infrastructure challenges and ensuring attractive prices will be decisive for the initiative’s success and for the role of natural gas in Brazil’s energy transition.
