Argus launches natural gas price assessments in Brazilian market
Argus, a market intelligence and advisory firm in the energy and commodity markets, has launched Brazil’s first assessed daily price for the natural gas spot market.
The move from the UK-headquartered company follows the opening of Brazil’s natural gas market to competition under a regulatory framework approved five years ago. The price aims to foster transparency in the sector by offering market participants pricing references based on real transactions from the spot market.
Adrian Binks, chairman and chief executive of Argus, says that the firm has observed growing demand among market participants for an indicator that more accurately reflects the fundamentals of natural gas in the country.
Although about 70% of all natural gas supplied in Brazil is produced domestically, pricing in the regulated market is still largely tied to external benchmarks – in particular to the Brent oil price and to the US exchange price for gas at Henry Hub which can be subject to different fundamental pressures than exist in Brazil.
“As Brazil’s natural gas market embraced competition, we worked closely with market participants to develop an independent price indicator that represents what’s happening in the domestic market. Our new gas price will bring transparency that will benefit the whole market,” Binks notes.
Natural gas accounts for about 10% of Brazil’s total energy supply, with most consumption in power generation and industry. Its relatively modest share is largely the result of high costs for consumers and infrastructure bottlenecks. However, natural gas is increasingly seen as a strategic asset for Brazil’s energy security and potentially for the country’s energy transition process.
