In January, Brazil’s national regulator, ANP, made Petrobras’ new pricing public, which had been initially announced in the second half of 2024. This latest price includes a discount in 2025, which was already expected and discussed in the market, and a new discount in 2026, which was a novelty.

As expected, 2025 has three price bands:

• The base molecule quota – up to 60% of the contracted daily quantity at the original contract price.

• The performance mechanism quota – from 60% to 90% of the contracted daily volume at 11% of Brent.

• The demand incentive quota – from 90% to 115% of the volume at 10% of Brent.

Petrobras has also presented a price change for 2026, where the base quota will increase to 90% of the contracted volume at the original price. The demand incentive quota will be set at 10% of Brent for any volume above that. Along with the discount effective in 2024, the price for each volume range can be depicted as shown in the figure below. Higher contract usage will imply a more significant price reduction for the consumers.

In 2025, Petrobras has firm contracts signed with local distribution companies (LDCs) for just over 20 million cubic meters per day (MMcmd), with prices varying between 11% and 13% of Brent. According to Rystad Energy's estimates, the discount initially offered last year could result in approximately $106 million in savings for the distributors. With the new discount, they can stack up an additional $26 million in savings, reaching a total discount of $132 million.

When looking at the international consequences, Petrobras’ marginal price has created a tool to better compete with imported gas in Brazil. At the same time, Bolivia can still export gas at a lower price than Petrobras is offering to the domestic market, as it has done with around 0.8 MMcmd to the commercialization company MGas. On the other hand, Argentina's new exports through Bolivia will face more challenging conditions when sending spot flows to Brazil, and even LNG spot cargoes will struggle to compete with this new Petrobras price.

With the latest government conditions, Argentina should have a minimum of 6.5% Brent price to export spot volumes. We expect Argentine gas to reach Brazil’s transportation pipeline entrance at between $6.8 and $7.9 per million British thermal units (MMBtu) after accounting for molecules and all transportation costs to reach Brazil. With spot LNG reaching the $16 per MMBtu mark, it creates even more attractiveness for Petrobras and other domestic producers to guarantee their position as the first supply source alternative.

Authors: 

Vinicius Romano

Vice President, Gas Markets Research
vinicius.romano@rystadenergy.com

Gabriela Sanches

Analyst, Gas Markets Research
gabriela.sanches@rystadenergy.com

(The data and/or forecasts in this column are Rystad Energy's, and the opinions are of the authors.)