Brazil May Gas Production Up From Year, Month Prior

(Argus, 18.Jun.2021) — Brazilian natural gas production in May rose by nearly 18pc from a year earlier and by more than 2pc from the prior month.

Output reached 134mn m³/d (4.75 Bcf/d) in May, preliminary data from Brazil’s oil and gas regulator ANP shows. The country’s record production level set in January 2020 is 138.7mn m³/d.

Natural gas reinjection in May reached 59mn m³/d, about 2pc less than the previous month, when reinjection hit a record. Some natural gas that is produced from oil and gas wells is pumped back into the wells to repressure the reservoir and increase future oil production. In yearly comparison, reinjection was down by 22pc.

Natural gas flaring rose by 5pc in May from a year earlier at 2.9mn m³/d, up by 2pc compared to April.

After reinjection and flaring, gas producers offered 57mn m³/d to the market in May, an increase of 19pc over May 2020 and 8pc over April.

Volumes offered to the market are still below the levels seen before Covid-19 restrictions took hold in March 2020, when 61.3mn m³/d was offered to the market.

As nearly 90pc of Brazilian gas production is associated with oil output, producers may choose to reinject the gas to elevate oil production or because of restrictions in gas processing, transporting or trading. The incentive to reinject is expected to drop when pre-salt flow gas pipeline Rota 3 starts operation, which is expected this year. The pipeline will be able to take 20mn m³/d of gas flow.

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By Flávia Pierry