Brazil’s Bolognesi to Build $2.3 Billion LNG-Fired Power Plants

Nov. 28 (Bloomberg) — Bolognesi Participacoes SA, the
biggest winner of Brazil’s power auction today, plans to invest
almost 6 billion reais ($2.3 billion) to build two LNG-fired
plants, the first such projects from a company other than state-run Petroleo Brasileiro SA.

With two thermal projects of 1,238 megawatts each, the
Porto Alegre, Brazil-based company won contracts to sell power
for 25 years starting in 2019, the Sao Paulo-based electricity
trading board CCEE said in a statement today.

“We will be the first player with the exception of
Petrobras to sell energy from LNG in Brazil,” Paulo Cesar Rutzen, Bolognesi’s vice president, said today by e-mail. He
said the company had won half of the electricity auctioned. “We
have LNG contracts with two large players.”

Brazil today awarded its first contracts in three years for
coal- and gas-fired power plants as the country seeks to replace
capacity from hydroelectric facilities that have curtailed
output amid the worst drought in eight decades. Bolognesi and
other thermoelectric developers won about 80 percent of the
4,979 megawatts sold in today’s auction.

Bolognesi’s plants will be in Suape, in the northeastern
state of Pernambuco, and in Rio Grande, in the southern state of
Rio Grande do Sul. Construction will begin next year and the
plants should be ready in 2019, Rutzen said. The units, each
with maximum consumption of 3 million metric tons of LNG a year,
will receive as many as 48 cargoes annually when the government
mandates operations at full capacity, he said in a telephone

25-Year Contracts

Brazil will buy a record 5 million metric tons of LNG this
year as the worst drought in decades is reducing output from
dams, according to estimates from London-based consultants
Energy Aspects Ltd.

Bolognesi has signed 25-year contracts to buy LNG from
countries in the Atlantic basin, Rutzen said by phone. He
declined to identity the suppliers or where the super-chilled
fuel will come from. Petrobras is currently the only LNG
importer in Brazil and so far all deals to import the fuel have
been done in the spot market.

“This is the first time Brazil is buying gas in long-term
contracts,” Marco Tavares, chairman of Rio de Janeiro-based
consultants Gas Energy, said by phone today. “This will
consolidate Brazil’s position as the biggest LNG importer in
South America in the medium term.”

To contact the reporters on this story:
Vanessa Dezem in Sao Paulo at;
Isis Almeida in London at

To contact the editors responsible for this story:
Reed Landberg at
Steven Frank, Robin Saponar

About BloombergNEF

BloombergNEF (BNEF) is a strategic research provider covering global commodity markets and the disruptive technologies driving the transition to a low-carbon economy. Our expert coverage assesses pathways for the power, transport, industry, buildings and agriculture sectors to adapt to the energy transition. We help commodity trading, corporate strategy, finance and policy professionals navigate change and generate opportunities.
Sign up for our free monthly newsletter →

Want to learn how we help our clients put it all together? Contact us