Manifesto in Defense of Appropriate Regulation for the Valuation of Natural Gas Transportation Assets
The Natural Gas Transportation System Users Council (CdU), composed of the Brazilian Association of Piped Gas Distribution Companies (ABEGÁS), the Brazilian Association of Oil and Gas Exploration and Production Companies (ABEP), the Brazilian Association of Independent Oil and Gas Producers (ABPIP), ABRACE Energia, the Brazilian Association of Thermoelectric Power Generators (ABRAGET), and the Federation of Industries of the State of Rio de Janeiro (FIRJAN), collectively representing Brazil’s natural gas shippers, hereby expresses its position on the following matter.
Brazil currently faces a unique opportunity to stimulate its economy and support the energy transition while ensuring security of supply through the strengthening and maturation of its natural gas market. The country is experiencing a pivotal moment in the development of a more robust and attractive environment for long-term investments, always guided by the principles of legal certainty.
An essential component of this process is the tariff review of natural gas transportation companies, a process that has been underway for more than a year at the National Agency of Petroleum, Natural Gas and Biofuels (ANP).
In this context, the importance of evaluating the application of the Recovered Capital Method (RCM) for the proper valuation of assets associated with the legacy contracts of Nova Transportadora do Sudeste S.A. (NTS) and Transportadora Associada de Gás S.A. (TAG) is unquestionable. This is the only methodology that provides legal certainty to the market, as it incorporates into future tariffs the specific characteristics of the development of Brazil’s natural gas transportation system.
This is a complex, necessary, and highly relevant discussion for the implementation of the regulatory framework governing natural gas transportation in Brazil, with significant impacts on the sector’s economic efficiency and the overall business environment.
The establishment of clear, transparent, and technically sound criteria for the application of the RCM is an important step toward strengthening regulatory predictability and legal certainty, both of which are fundamental for attracting investments and ensuring the sustainable development of gas transportation infrastructure.
At the same time, it is important that the regulatory treatment applied to NTS and TAG assets remains aligned with the principles established by Brazil’s Gas Law, particularly those aimed at promoting efficiency, competition, and tariff affordability. The manner in which this valuation is conducted will directly influence transportation tariffs and, consequently, the competitiveness of natural gas within Brazil’s energy matrix.
In light of the above, all entities and shippers represented by the Users Council and signatories to this manifesto commend the ANP for placing on its agenda the opening of a new public consultation regarding the application of the RCM methodology to the Asset Base. Among the regulated methodologies, the RCM is the only one that avoids the double remuneration of assets.
This measure reaffirms the Agency’s commitment to a participatory process guided by the public interest, seeking legal, appropriate, and fair solutions that will strengthen Brazil’s natural gas market in the long term and expand its benefits for society.
