Brazilian Firms Win More Fuel Terminals
04.08.2019 - NEWS

April 8, 2019 [Argus] – Brazilian firms bid aggressively today for one greenfield and five brownfield fuel terminals in the northern state of Para, raising around R448mn ($116mn) in signing bonuses.

 

The winners include some of the same domestic companies that picked up four terminals in a 22 March fuel terminal auction.

State-controlled Petrobras, Ipiranga and Cosan-Shell joint venture Raizen remained a driving force behind today’s auction

Tequimar, the fuel tanking subsidiary of Brazilian conglomerate Ultra Group, sat out last month’s offer, but today pledged a winning R180.5mn signing bonus for the greenfield Vila do Conde terminal.

The area is suitable for 4mn t/yr of new storage capacity, according to Antaq. The terminal lease runs for an initial 25 years with an optional extension for up to 70 years.

The five brownfield terminals awarded today are located at the Miramar chemicals port complex in Belem. The winners already operate around 207,000m³ of combined storage capacity at the port.

Ipirianga, one of Brazil’s largest fuel distributors, pledged R87mn for the BEL 04 terminal. Fuel storage capacity is projected grow to 864,000 m³/yr over the life of the lease, also with an initial 15-year period and the option for extension up to 70 years.

Petroleo Sabba, part of the Raizen group, pledged R60mn for BEL 02B. Consorcio Latitude, comprised of Ipiranga and Petroleo Sabba, pledged R40mn for the BEL 02A terminal. The two areas have initial 15-year leases with the possibility of extensions for up to 70 years.

Petrobras’ fuel distribution subsidiary Petrobras Distribuidora (BR) won the BEL 08 terminal with a signing bonus of R50mn, and the firm’s transport subsidiary Transpetro picked up the BEL 09 terminal with a winning bid of R30mn. The leases for the areas have an initial 20-year term with the option to extend up to 70 years. Storage capacity at BEL 09 is expected to grow to 530,000 t/yr with a focus on LPG.

The total investment for the six terminals is estimated at around R430mn, according to Brazilian waterways regulator Antaq.

“In each of the auctions, our expectations were exceeded,” Brazil’s infrastructure minister Tarcisio Gomes de Freitas said today, adding that the areas are key to ensuring fuel supply in Brazil’s north, northeast and center-west regions.

With today’s auction, Brazilian president Jair Bolsonaro met his administration’s goal of auctioning 23 concessions during the first 100 days of his term that started in January.

Despite struggles with other reforms such as pensions, the government has already held successful auctions for airports, seaports, highways and railways.

The government is currently finalizing concession terms for other fuel terminals in Santos and Paranagua ports for auction later this year, government officials said today.

With no new refining capacity planned before 2023 at the earliest, Brazil will continue to rely on fuel imports well into the next decade. The government’s infrastructure plan reflects the need for greater import capacity to meet projected demand growth.

Opening Brazil’s ports has been under discussion since 2013, but only gained traction in the final weeks of former president Michel Temer’s two-year term.

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