Brasília – Brazil’s lower house approved a new regulatory framework for the natural gas sector, the bill 4.476/2020, in the early hours of Wednesday, 17. All amendments of the Federal Senate were rejected. It will now be signed into law by President Jair Bolsonaro.
The text provides for the decentration of market by not allowing that one single company can work in all phases from production and extraction to distribution. Under the bill, companies interested in distribution will need a simple authorization rather than a more complex concession contract.
The new regulatory framework for gas also says that the authorizations don’t have a set time limit and may be revoked by the company’s request; if it bankrupts or fail to meet its obligations; if the pipeline is deactivated or the company interferes or suffers from the interference of other gas industry agents.
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According to the new rules, if there are more than one company interested in building gas pipelines, Energy regulator ANP must carry out a public selection process. Under the bill, ANP will have more power to foster competition and reduce market concentration.
Translated by Guilherme Miranda
