Country | Brazil
Region | Europe
Sector | Energy
QII Principles | Principle 1: Sustainable Growth & Development Principle 2: Economic Efficiency Principle 3: Environmental Considerations Principle 4: Building Resilience Principle 5: Social Considerations Principle 6: Infrastructure Governance
QII Sub-Principles | 1: SDGs, 1: Paris Agreement, 1: Wider economic benefits, 2: Life-cycle costing, 3: Environmental Impact Mitigation, 3: Disclosure of environmental aspects, 3: Climate, 3: Emissions, 4: Resilience, 5: Job creation, 5: Occupational health and safety, 5: Universal access to services, 6: Growth & development strategies, 6: Policy
Overview
In Brazil, the logistics for the use of pipelines for transporting oil, oil derivatives and biofuels, is basically operated by Petrobrás Transporte S.A. (Transpetro) – a subsidiary company of Petróleo Brasileiro S.A. (Petrobras) – that deals with oil and oil derivatives movement ,- as well as by the company Logum Logística S.A., which concentrates on ethanol movement.
Since 2011, Logum has been working in Brazil with the purpose to develop logistics operations in the areas of fuel and biofuel (with activities related to logistics, load and unloading, movement and stockage, port operations and terrestrial terminal operations) which involve multimodal transport, such as pipelines, highways (trucks and tanks) and cabotage (ships).
Logum is implementing an infrastructure project that aims at expanding its system to 128 kilometers, covering four branches and a terminal, namely: Guararema Pipeline – Suzano (38 km), Suzano Pipeline – Guarulhos (25 km), Guarulhos Terminal, Guarulhos Pipeline-São Caetano do Sul (29 km) and Guararema Pipeline – São José dos Campos (36 km). Investments are estimated at R$760 million (U$137,12 million circa). Works should be completed in October 2021.
The Project is funded by the Banco Nacional de Desenvolvimento Econômico e Social (BNDES –Brazilian Development Bank). It has been qualified for the Special Regime of Incentives for Infrastructure Development (REIDI) which is a federal government scheme that provides fiscal benefits for acquisitions, rentals and import of goods and services related to the Project approved for a five-year period.
Timeline
Q3/2021
Relevance to QII
The Pipeline Project for movement of fuels, especially ethanol, is compatible with the goals established by the Brazilian energy policy to be attained by governmental actions such as i) the Abastece Brasil initiative - implemented with a view to develop the fuel market whose demand is increasing and requires investments in infrastructure – and ii) the National Biofuel Policy (Renovabio) which promotes the expansion of biofuels production and use within the national energy matrix in order to contribute to the reduction of greenhouse gas emissions.
Furthermore, the use of pipelines for movement of fuels consists of a means of transportation more efficient and with a lower environmental impact when compared with other modalities.
The Pipeline Project has the potential to diversify the fuel transportation infrastructure and consequently foster competitiveness and promote market development, resulting in benefits for society as a whole.
The Project represents an important venture to induce regional development. The pipeline should replace road transport of load resulting in enhanced operational safety, improved risk mitigation, faster and more efficient fuel transferences, among others. Additionally it should contribute to reduce the circulation of heavy vehicles in roads.
There will be an increase in job creation and income. Approximately 900 direct and indirect jobs will be created in 2020-2021.
It is expected that this Project will allow the integration of environment concerns with infrastructure investments because it contributes to the reduction of global and local levels of pollution and foster the growth of the biofuels sector in the Brazil energy matrix. Moreover, it will improve infrastructure governance by facilitating entry for new players.
Benefits
The pipeline will be efficient for long distance transportation and will contribute to the reduction of truck traffic in highways and as a consequence it is also plays an important role in the transition to a low-carbon economy, which entails the reduction of greenhouse gas emission (GHG). Additional outputs related are the reduction of local levels of pollution, road accidents and the social costs implicated.
Moreover the project will contribute to the increase of the role of biofuels in the Brazilian energy matrix. As a result, there will be an increase in job creation and income, a boost to regional development and enhancement of operational safety in activities involved in load movements.
Finally, there will be a flexibilization of options for the movement of fuels whose demand is expected to be growing within a ten-year horizon, increasing competitiveness of the sector and promoting market consolidation to better serve Brazilian consumers in terms of price, quality, product offer, and therefore improving well-being of society as a whole.
Metrics
Pipeline use ratio = the volume of the fuels movement per year/the annual capacity of the pipeline’s fuels movement.
Name of Institute
Ministry of Mines and Energy of Brazil/Oil, Natural Gas and Biofuels Secretariat
Website URL