Brazil's NTS to invest $2.4 billion to expand gas pipelines, storage

By Rafaella Barros

Sept 23 (Reuters) - Brazilian natural gas pipeline operator NTS is set to spend 12 billion reais ($2.4 billion) over the next eight years on projects such as a network expansion and gas storage, the company said on Friday.

NTS' plan comes as Brazil is seeking ways to increase its gas supplies and about five years after Canada's Brookfield Asset Management acquired a controlling stake in the firm from state-owned Petrobras.

The funds will be directed mainly to building liquefied natural gas (LNG) storage facilities in Rio de Janeiro state and expanding the transport capacity of the Campinas-Rio gas pipeline. The conduit carries gas from the "pre-salt" area off the coast of Rio state to Petrobras' largest refinery, Replan.

"If we observe, the European countries with LNG storage are in a much better situation than those that don't have it," said NTS Chief Executive Erick Pettendorfer. "So, we are developing a 'storage' for a sector that demands agility in dispatching and, at the same time, reliability."

Brazil lacks logistical solutions for unusual surges in domestic demand, he said, as happened during the country's 2021 drought, which triggered a big drop in hydropower output, forcing a sharp increase in the use of thermoelectric plants as well as higher energy prices.

"This corridor will be an opportunity for the pre-salt players to place their product into the market", he said.

NTS' investment package also includes building a compression station, aiming to increase Replan's gas output.

($1 = 5.1152 reais) (Reporting by Rafaella Barros; Writing by Peter Frontini; Editing by Stephen Coates)