CENIBRA starts up gas pipeline in the state of Minas Gerais in Brazil

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CENIBRA starts up gas pipeline in the state of Minas Gerais in Brazil

October 06, 2010 - 05:04
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BELO ORIENTE, Brazil, Oct. 6, 2010 (Press Release) -The Steel Valley Gas Pipeline started up operations by the end of September and the event was celebrated at CENIBRA's industrial plant. Sérgio Alair Barroso (Secretary of Economic Development of Minas Gerais), Paulo Eduardo Rocha Brant (CENIBRA CEO), Márcio Augusto Vasconcelos Nunes (GASMIG CEO) and Djalma Bastos Morais (CEMIG CEO) were among the attendees, not to mention several mayors from cities where CENIBRA operates.

The gas line to CENIBRA is part of a GASMIG's project to supply the main companies located along the gas pipeline in the state of Minas Gerais. The pipeline ends in Belo Oriente, at CENIBRA's plant. The project required the construction of 331 km of large-diameter piping to be connected to the existing Rio-Belo Horizonte gas pipeline.

Clean Development

In an initiative to implement Clean Development Mechanism (CDM) projects, CENIBRA signed a letter of intention with GASMIG in September 2006 covering the supply of natural gas, which will be initially used in lime kilns in replacement for fuel oils.

CENIBRA will consume approximately 51,600,000 m3/year of gas (4,300,000 m3/month) in replacement for oil, which will result in lower emissions of particulate matter, greenhouse gases and other gases generated by fuel oil burning.

The fuel oil replacement for natural gas will take place as a proportion of the heat power of both fuels. Initially, natural gas will be used in lime kilns (a raw material for pulp production), which require large amounts of heat, up to now obtained from oil burning.

Investments in the Steel Valley Gas Pipeline amounted to R$ 700 million

With investments of around R$ 700 million, this stage of the gas pipeline project links Ouro Branco to Belo Oriente, going through Ouro Preto, João Monlevade, Timóteo and Ipatinga, among other cities. CENIBRA is one of the companies in the region that will use the newly available source of energy.

The Steel Valley Gas Pipeline is 331 kilometers long, and the works were split in two stages. The first stage (53 kilometers long) links São Brás do Suaçuí to Ouro Branco, and it came on stream in 2006. The second stage comprises 278 kilometers of pipes linking Ouro Branco to Belo Oriente.

The pipeline will be able to convey 2.4 million cubic meters/day of natural gas to provide the region with a more competitive source of energy, with many benefits to the Steel Valley economy. On top of being more competitive, natural gas is a less pollutant energy source, with low toxic waste emissions, which contributes to improved air quality. It can be used in the industry, households, wholesale and retail businesses, and as car fuel as well.

Expansion

Created in 1986, Gasmig equity capital is controlled by Cemig. It is the sole pipeline natural gas distributor in the whole state of Minas Gerais as granted by the state government. It operates in a variety of gas consuming segments, like industries, houses, retail and wholesale businesses, compressed gas, liquefied gas, automotive gas and gas for thermoelectric power generation.

Gasmig is one of the natural gas distributors that has grown the fastest in Brazil. This year, the company will achieve a gas distribution volume of 662.7 million cubic meters. Moreover, Gasmig more than tripled its distribution network, having reached the mark of 800 kilometers during second half 2010. In excess of R$ 1 billion has been invested in expansion works.

The company operates in the Metropolitan Region of Belo Horizonte, Steel Valley, Southern Minas Gerais, Mantiqueira and Campo das Vertentes regions, and several cities in Center Minas Gerais. It has about 280 customers, including 98 large industries and 90 natural gas fueling stations.

Gasmig is in process of entering the natural gas distribution market for residential consumers and small businesses in the cities where it operates. Long-term gas supply contracts with Petrobras ensure the required gas volumes to meet the current demand and the planned expansion of the distribution system in Minas Gerais up to 2026.