YPFB-Petrobras new gas supply agreement: what are the key commercial changes? Report

Insight 25 March 2020

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Report summary

YPFB-Petrobras new gas supply agreement: what are the key commercial changes? Signed in 1996, the 20-year Bolivian gas supply agreement shaped the history of gas industry in Brazil. The original GSA started in July 1999 and ended in December 2019. After a transition agreement that lasted until 10 March 2020, both parties signed the final addendum for the GSA for the consumption of ‘contracted energy remaining’, which could last until 2025. In this insight, we explore the main commercial aspects of this new GSA and the impact on the Southern Cone gas market and players. Read this report to understand: What will be the gas pricing and payment mechanism. How the flexibility of the contract has changed. What the new GSA means for YPFB, Petrobras and potential buyers in Brazil. How this new GSA will affect future Bolivian gas flows to Argentina.

Executive summary
- The historical framework
- The new GSA addendum: what has changed?
- New contracted daily quantity and guaranteed daily quantity
- Gas pricing: eighth addendum preserves oil formula
- What does it mean for the Southern Cone gas players and market?
- For YPFB
- For Petrobras
- For Argentina
- For other potential buyers in Brazil

Tables and charts

This report includes 7 images and tables including:

Bolivia gas price formula:
Historical Bolivian gas prices and different Petrobras’ price regimes in Brazil
Comparison between the original and new GSAs terms:

Historical Bolivian gas flows to Petrobras vs contracted daily quantities (QDC) and guaranteed daily quantities (QDG)
Historical and projected YPFB gas prices for Petrobras at the transfer point
Gas supply cost by source vs gas price with Brazil Southeast LDC (without transport cost)
Bolivian gas supply capacity for exports vs current firm GSAs with Petrobras and ENARSA (Ieasa)