Alvopetro in Brazil gas sales agreement

Canadian E&P company Alvopetro Energy has entered into a long-term gas sales agreement and has laid out its commercialisation plans for the Caburé field in Bahia state, the company said in a Monday press statement.

The company will sell its output to gas distributor Bahiagás for USD 5-8.50 per million Btu, with deliveries scheduled to begin at the end of 2019. The deal stipulates that Alvopetro will sell 150,000 cubic metres (5.3 mcf) per day under a firm contract, and as much as 350,000 cubic metres (12.4 mcf) on an interruptible basis.

The deal represents the first gas sales agreement that Bahiagás has had with an independent producer in Bahia state.

To commercialise the gas, Bahiagás will build new infrastructure including a 1-mcm (35-mcf) per day delivery point and a 15-kilometre pipeline. Meanwhile, Alvopetro will construct an 11-kilometre pipeline and a gas processing facility at the Caburé field.

According to the statement, much of the required field survey work, engineering and permitting has already been done and Alvopetro has submitted applications for infrastructure construction.