On September 1st, 2020, the Brazilian House of Representatives approved the text of the New Gas Law after 7 years of debates among government, institutions, market players and society. To understand the relevance of this expected change in law and its potential impacts on the Brazilian gas scenario in the next few years, it is important to take a quick look at the background that has brought Brazil to this point.
The current Gas Law (Federal Law No. 11,909) was enacted in 2009, but was not sufficient to encourage a more competitive market opening process – mainly due to the fact that Petrobras continued to exercise its dominant position in the entire gas value chain. The first amendment to the current Gas Law was proposed in 2013 by means of the Bill of Law No. 6,407, and its review gained strong support in 2016, when the Brazilian Federal Government launched the Gas for Growth Initiative.
The Gas for Growth Initiative aimed to reform the Brazilian gas regulatory framework to promote the gas market opening process as Petrobras had decided to divest its gas midstream assets. In 2019, after presidential elections, the Brazilian Government put together the New Gas Market Program, which continued with the same goals and principles of the former Gas for Growth Initiative, to create a competitive and unbundled gas market in Brazil.