SUBSCRIBE
PROFILE

Up to 3.5 million m³ of gas redirected to Brazil’s spot market in 2025

Brazil's gas market shifts toward spot contracts, driven by pricing gaps and greater contractual flexibility for local distributors.

Share:

Comprehensive energy news coverage, updated nonstop

Annual subscription

8.25€/month*

*billed annually at 99€/year for the first year then 149,00€/year ​

Unlimited access • Archives included • Professional invoice

SUBSCRIBE - 99€/year

OTHER ACCESS OPTIONS

Monthly subscription

Unlimited access • Archives included

5.2€/month*
then 14.90€ per month thereafter

FREE ACCOUNT

3 articles offered per month

FREE

*Prices are excluding VAT, which may vary depending on your location or professional status

Since 2021: 35,000 articles • 150+ analyses per week

Up to 3.5 million cubic metres per day of natural gas could move from long-term contracts to the spot market in Brazil in 2025, according to a study published by consultancy firm Wood Mackenzie. This shift results from strategic use of Take-or-Pay (ToP) flexibility clauses, enabling distributors to capture pricing opportunities ranging between $5.9 and $10.5 per million British thermal units (mmbtu).

This change could redefine contractual relations in Brazil’s gas sector, particularly for Local Distribution Companies (LDCs). The spot market, once seen as an opportunistic tool, is now being used as a viable alternative to firm commitments, according to Javier Toro, Research Director for Gas and Power in the Southern Cone at Wood Mackenzie.

A growing spot market

In 2024, more than 60 contracts were signed on the spot market, amounting to 40 million cubic metres, mostly in the Northeast region. These transactions were mainly concluded during the last week of each month, accounting for 41% of monthly sales. Companies Copergás, Cegás, Bahiagás and SCGás alone accounted for over 95% of traded volumes.

This repositioning stems from stagnant LDC demand, a gradual shift of large industrial consumers to the free market, and the emergence of new trading platforms. Contractual clauses between ToP volumes and Daily Contracted Quantity (DCQ) now allow spot volumes to be integrated without penalty.

Pricing changes and competitive pressure

The report states that Petróleo Brasileiro S.A. (Petrobras), currently supplying 70% of LDC gas, is adjusting its pricing formulas. Prices applied to volumes above ToP thresholds could drop from 11.7% to 10% of Brent value. This change narrows the gap with spot market pricing, even though spot remains competitive amid global Brent volatility and growing pressure from new suppliers.

Greater supply diversity, along with the entrance of new market players, has increased liquidity and introduced alternative commercial models. “If current conditions persist, 2025 could mark a structural turning point in how Brazilian LDCs manage their portfolios,” said Toro.

  • Popular on energynews.pro
US Army selects nine bases for future deployment of nuclear microreactors
Subsea7 reports 27% increase in adjusted EBITDA in third quarter
UK urged to choose between carbon capture and aviation fuels
Battery storage market projected to reach $99.67bn by 2033
Blackstone injects $1.2bn into West Virginia’s first natural gas power plant
McDermott extends contract for Golden Pass LNG Trains 2 and 3
McDermott has signed a contract amendment with Golden Pass LNG Terminal to complete Trains 2 and 3 of the liquefied natural gas export terminal in Texas, continuing its role as lead partner on the project.
Exxon Mobil takes 40% stake in Bahia pipeline project
Exxon Mobil will acquire a 40% stake in the Bahia pipeline and co-finance its expansion to transport up to 1 million barrels per day of natural gas liquids from the Permian Basin.
Germany boosts public investment in five LNG terminals by 2026
The German state is multiplying LNG infrastructure projects in the North Sea and the Baltic Sea to secure supplies, with five floating terminals under public supervision under development.
Aramco commits over $30 billion to new strategic deals in the United States
Aramco has signed 17 new memoranda of understanding with U.S. companies, covering LNG, advanced materials and financial services, with a potential value exceeding $30 billion.
Bratislava considers suing the European Union over Russian gas halt
The Slovak government is reviewing a potential lawsuit against the European Commission following its decision to end Russian gas deliveries by 2028, citing serious economic harm to the country.
EU eases gas storage rules for 2025-2027 with greater flexibility
The European Union is extending its gas storage regime, keeping a legal 90% target but widening national leeway on timing and filling volumes to reduce the price pressure from mandatory obligations.
Mozambique launches audit on $4.5bn cost overrun of TotalEnergies project
The Mozambican government has initiated a review of the expenses incurred during the five-year suspension of TotalEnergies' gas project, halted due to an armed insurgency in the country’s north.
Rig count drops in the United States despite record production
The number of active drilling rigs in the continental United States continues to decline while oil and natural gas production reaches historic levels, driven by operational efficiency gains.
Shell sells 50% of Tobermory to Ithaca to share UK fiscal risk
Shell sells a 50% stake in Tobermory West of Shetland to Ithaca Energy, while retaining operatorship, reinforcing a partnership already tested on Tornado, amid high fiscal pressure and regulatory uncertainty in the North Sea.
Novatek sells liquefied gas with 40% discount to China despite sanctions
Russian company Novatek applied major discounts on its liquefied natural gas cargoes to attract Chinese buyers, reviving sales from the Arctic LNG 2 project under Western sanctions.
Ukraine receives 100 mn m³ of US gas via Lithuania
A first vessel chartered by a Ukrainian trader delivered American liquefied gas to Lithuania, marking the opening of a new maritime supply route ahead of the winter season.
Mozambique LNG, criminal complaint and economic recovery under judicial pressure
A German NGO has filed in France a complaint against TotalEnergies for alleged war crimes complicity around Mozambique LNG, just as the country seeks to restart this key gas project without any judicial decision yet on the substance.
Hut 8 sells 310 MW gas-fired portfolio to TransAlta after asset optimisation
Hut 8 transfers four natural gas power plants to TransAlta following a turnaround plan and five-year capacity contracts secured in Ontario.
Tokyo Gas sells TVL LLC to Grayrock Energy for $255mn and reallocates its US gas portfolio
By selling its US subsidiary TVL LLC, active in the Haynesville and Cotton Valley formations in Louisiana, to Grayrock Energy for $255mn, Tokyo Gas pursues a targeted rotation of its upstream assets while strengthening, through TG Natural Resources, its exposure to major US gas hubs supporting its LNG value chain.
TotalEnergies signs €5.1bn deal with EPH for 14 GW of flexible capacity
TotalEnergies acquires 50% of a flexible power generation portfolio from EPH, reinforcing its gas-to-power strategy in Europe through a €10.6bn joint venture.
ConocoPhillips reveals major new gas discovery offshore Australia
The Essington-1 well identified significant hydrocarbon columns in the Otway Basin, strengthening investment prospects for the partners in the drilling programme.
India signs major US LPG deal under diplomatic pressure
New Delhi secures 2.2 million tonnes of liquefied petroleum gas annually from the United States, a state-funded commitment amid American sanctions and shifting supply strategies.
INNIO deploys 450 MW flexible power plant to support UK grid
INNIO and Clarke Energy are building a 450 MW gas engine power plant in Thurrock to stabilise the electricity grid in southeast England and supply nearly one million households.
Aramco deploys autonomous AI agents to optimise Fadhili gas plant
Aramco and Yokogawa have completed the deployment of autonomous artificial intelligence agents in the gas processing unit of Fadhili, reducing energy and chemical consumption while limiting human intervention.
S‑Fuelcell intensifies GFOS rollout to support AI data centres
S‑Fuelcell is accelerating the launch of its GFOS platform to provide autonomous power to AI data centres facing grid saturation and a continuous rise in energy demand.

All the latest energy news, all the time

Annual subscription

8.25€/month*

*billed annually at 99€/year for the first year then 149,00€/year ​

Unlimited access - Archives included - Pro invoice

START - 99€/year

Monthly subscription

Unlimited access • Archives included

5.2€/month*
then 14.90€ per month thereafter

*Prices shown are exclusive of VAT, which may vary according to your location or professional status.

Since 2021: 30,000 articles - +150 analyses/week.