ANP Approves New Resolution on Liquefied Natural Gas (LNG)

On July 2, 2024, Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) published Resolution No. 971/2024 (the “Resolution”), regulating the authorization of the activities of bulk Liquefied Natural Gas (“LNG”) conditioning and movement by means other than pipelines.

The Resolution entered into force on the date of its publication, revoking ANP Ordinance 118/2000, which regulated bulk LNG distribution activities and the construction, expansion, and operation of LNG distribution centers.

More than 20 years after the publication of the aforementioned ordinance, this regulatory review was motivated by significant changes, such as the publication of Law No. 14,134/2021 ("New Gas Law"), the structure of the Brazilian natural gas market adapting to the new legal provisions, the introduction of technological innovations, and the emergence of new operational safety criteria in specific technical standards.

The Resolution deals separately with the commercialization of natural gas. The new regulation addresses the possibility of new business models, in order to offer alternatives for the development of small-scale LNG projects, as well as the expansion of natural gas transportation, especially in regions lacking pipeline infrastructure. In this respect, the conditioning and movement of bulk LNG can be carried out by road, rail or waterway, in an isolated or integrated manner.

The Resolution also establishes that biomethane will be treated in the same way as natural gas, as provided for in the New Gas Law. It also states that the transhipment of LNG to supply vessels is considered a maritime support or port support operation, and must be carried out by an agent authorized to carry out transhipment operations under the terms of ANP Resolution 811/2020.

The Resolution also aims to simplify the authorization process, separated from the LNG marketing authorization, requiring the grant under the terms of ANP Resolution 52/2011.

This regulatory review aims to contribute to the efficient use of existing infrastructures, increase the supply of gas to the market, and harmonize regulation throughout the natural gas value chain.