Ceiba Energy’s LNG-to-power project in Brazil takes step forward

Houston-based Ceiba Energy is moving forward with its planned Portocem LNG-to-power project in Brazil that will include a floating storage and regasification unit.

Ceiba Energy, backed by US-based investment firm Denham Capital, said in a statement issued this week it won a bid for a 15-year power purchase agreement (PPA) to build, own and operate a new 1.6 GW power plant in Brazil.

The company’s Portocem LNG-to-power project won 30 percent of the total demand offered by Brazil’s power regulator Aneel and the Ministry of Energy in this first of its kind capacity auction, which took place on December 21, 2021, it said.

$750 million project

The project’s total investment will reach 4.2 billion reais ($750 million).

It would be financed from Denham Capital’s equity funds and debt to be raised from local sources such as regional and national development banks as well as capital markets, among others, Ceiba Energy said.

Also, Ceiba Energy will develop the Portocem LNG-to-power project in the Pecem industrial and port complex, in the state of Ceará in northeast Brazil.

It will include four, gas-fired, simple cycle units with capacity of 1.6 GW and its associated FSRU. The firm did not reveal any information regarding the FSRU.

Ceiba Energy announced the acquisition of this LNG-to-power project in a statement in April 2020.

After that, the firm bought Breitener Energética, which operates two gas-fired power plants located in Manaus, from Brazil’s state-owned giant Petrobras.

Petrobras owns three FSRU-based terminals in Brazil, including one in Pecem.

According to Ceiba Energy, the Portocem project would supply the “much-needed capacity to back the existing reliance on intermittent energy coming from renewable sources, while the FSRU would open up possibilities to bring gas to the region supporting industrial growth and energy transition.”

Portocem is “ideally located” to connect to existing gas pipeline and possible new gas infrastructure development toward Brazil’s interior regions.

Additionally, existing nearby electrical transmission infrastructure makes the location even more attractive for a project of this scale, Ceiba Energy said.

“Strong support”

The firm said it would sell Portocem’s capacity to the Brazilian market as a reserve contract, minimizing the risk of system wide blackouts in low hydrology years.

“Portocem’s very competitive capacity price will back up the further expansion of cheap, renewable energy in Brazil, further contributing to long-term reductions in the cost of electricity in Brazil,” it said.

The project also has “strong support” from Ceará’s state government, the Pecem complex, and Cegas, the local gas distribution company.

Emilio Vicens, CEO of Ceiba Energy, welcomed the success of the Portocem project.

“Our entire Houston and Brazil based teams worked diligently for a few years to be in this privileged position with an asset of this scale and a capacity PPA of this quality in a market like Brazil,” he said.

“This asset complements and transforms our expanding portfolio of infrastructure projects in Brazil as we look to capitalize on the significant growth potential in the Latam region,” Vicens said.

- Advertisements -

Most Popular

BP expects LNG demand to grow up to 40 percent by 2030

UK-based energy giant BP expects global demand for liquefied natural gas (LNG) to rise up to 40 percent by...

Venture Global’s Plaquemines LNG gets OK to introduce gas to GTG

US LNG exporter Venture Global LNG has received approval from US energy regulators to introduce natural gas to the...

AG&P LNG inks deal with BKLS to deliver spot LNG cargo to China

Nebula Energy’s AG&P LNG has signed a deal with Singapore-based BK LNG Solution (BKLS) to deliver one spot liquefied...

More News Like This

Karpowership, Petrobras ink LNG pact

Turkey’s Karpowership, part of Karadeniz, and Brazil’s state-owned energy firm Petrobras have signed a memorandum of intent to combine...

NFE wraps up Brazilian LNG-to-power deal

US LNG player New Fortress Energy has completed its previously announced deal with Ceiba Energy to acquire a 1.6...

NFE in Brazilian LNG-to-power move

US LNG player New Fortress Energy said it had signed a definitive deal with Ceiba Energy to acquire a...

Brazil’s Petrobras reports lower regas volumes

Brazil’s state-owned energy firm Petrobras reported a 90 percent drop in its liquefied natural gas (LNG) imports in the...