Brazil’s inland treasure

Brazil’s inland treasure

Gas deposits in Brazil’s interior could be a treasure trove for generating power, but the lack of infrastructure inland to move it has been prohibitive. But Wärtsilä found a way to tap into these caches, bringing about electricity and employment at the same time.

Text: Michael Levitin Photo: Wärtsilä

When the Brazilian oil company Imetame Energia discovered gas fields in the interior of Bahia five years ago, it saw no way of turning the gas into money. Brazil’s pipeline infrastructure runs only along the Atlantic coast, stranding many inland deposits like the kind found in Bahia. As a small and independent producer, Imetame attempted to sell the fields to the state-run oil giant Petrobras but couldn’t reach a deal. It was considering closing the fields.

Problem-solving power

That’s when Wärtsilä approached the company and offered a solution: to build a power plant running on natural gas, based on internal combustion engines, now known as UTE Prosperidade I, very near the fields. Using a “Gas to Wire” concept, Wärtsilä promised to monetize the gas by generating electricity on location with a baseload power plant, then feeding the energy through transmission lines directly into the national grid.

Completing the deal, however, wasn’t such a straightforward process. Wärtsilä’s primary value was its knowledge of the electricity market. So it presented Imetame a package and worked as a consultant, helping the company build the project plan and win a 2015 government auction that enabled it to buy power capacity. “They took the risk, they analysed the situation, and they were very successful,” Wärtsilä’s Business Development Manager, Gabriel Cavados, says of Imetame.

Finally, in May 2016, Wärtsilä signed a EUR 10 million contract with Imetame to supply three Wärtsilä 34SG gas engines and equipment for the 28 MW natural gas plant. Scheduled to be completed by January 2018, the plant will help supply energy to the industrial city of Camaçari, located 50 kilometres northeast of Salvador. “Our technology combines high-efficiency engines with low cost — a good cost-benefit value for the auction. The solution makes it very feasible to find gas inland and turn it into electricity,” says Cavados. Above all, “it’s a great opportunity for the developers to turn gas into good money.”

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Only the beginning

This isn’t the first time Wärtsilä has implemented a successful Gas to Wire concept in Brazil; in 2013, the company’s 56 MW Parnaíba IV flexible, gas-fired plant opened in the northeastern state of Maranhão. Brazil currently pays a high price, between USD 7-8 per million British Thermal Unit (BTU), for liquefied natural gas (LNG) used for power generation. But by monetizing gas found in the country’s interior, producers can cut the cost of energy to USD 1-2 per million BTU, which translates into enormous savings for consumers.

Now the Imetame deal could point the way toward future inland gas exploration across the country, using Brazil’s strong transmission infrastructure and interconnected system for power generation. “If you find a natural gas field in an isolated area, you won’t be able to connect to the pipeline grid,” says Cavados, “but you can build a power plant, connect to the electrical system and turn that gas into money.”

After Imetame won the 2015 auction, it discovered more gas in the same area. This means that Prosperidade II and Prosperidade III are likely to follow soon. The plan will lower the electricity load in the region while helping to supply the load in nearby Camaçari. Moreover, the plant is expected to create around 500 jobs in a poor and underdeveloped state where additional household income is badly needed.

Positive partnership

From a sales perspective, Cavados says the lengthy process of negotiation and collaboration between Wärtsilä and Imetame resulted in “a very good experience. We helped them a lot, supported them during the development, and in the end, they bought the equipment from us. It was a very good partnership —exactly the type of relationship that we try to build with our customers,” he adds.

According to Roberto Baptista, Director of Imetame, “Wärtsilä was crucial in providing technical support on the project design and also in helping Imetame understand this new business of power generation. A power plant based on Wärtsilä’s technology proved to be the best solution to turn the gas into money.”

Opportunities for new discoveries of gas in Brazil’s interior are promising. The country’s Oil and Gas Regulator (ANP) is organising tender rounds each year, offering onshore areas with an exclusive focus to increase exploration of inland natural gas fields. So the future Gas to Wire market in Brazil has powerful potential.

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