The Federal Government enacted a decree that regulates the new legal framework for the natural gas market, providing conditions, clarifications, and principles to implement a more dynamic gas market. The Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) will provide further regulation.

The Federal Government enacted Decree n. 10.712/2021, regulating the newly established legal framework for the Brazilian natural gas market (Law n. 14.134/2021). The new decree is designed to clarify specific provisions of the legal framework and guide the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP) in providing tangible rules and procedures to improve the Brazilian natural gas market.

As reported in the 23rd edition of the Regulatory Report, the legal framework was designed to promote a more dynamic gas market and attract new players to the sector, which includes transportation, treatment, processing, storage, and commercialization activities. The new decree provided, in its third article, additional national energy policy principles to be observed by ANP. It also provided further clarifications on:

  • The equal treatment of natural gas and its substitutes, such as biomethane, by ANP (article 4);
  • Legal requirements for pipeline transportation of natural gas (articles 7 to 11), including the prerogative of state legislation in authorizing direct connections between pipelines and final users (article 9);
  • Conditions to be observed by ANP related to subterranean storage infrastructure and non-discriminatory access of treatment or processing facilities (articles 12 to 17); and
  • Market competition rules for the distribution and commercialization of natural gas (articles 18 to 22), including conditions to be observed by ANP in order to prevent anticompetitive practices.

Apart from ANP’s central role in establishing the regulatory requirements for the new gas market, the Ministry of Mines and Energy (MME) will be responsible for articulating the necessary regulatory harmonization process with state governments, which may establish voluntary cooperation agreements with federal representatives, namely, the “National Pact for the Development of the Natural Gas Market” (article 27).

The new decree revoked Decrees n. 7.382/2010 and n. 9.616/2018.