RIO DE JANEIRO (Dow Jones)--Brazilian state-run energy giant Petrobras (PBR) successfully launched its first auction of natural gas, with 16 gas distributors participating, the company said late Friday.
Petrobras said it sold 3.59 million cubic meters of natural gas a day for May delivery, with the gas fetching an average price of $4.20 per British thermal unit, or BTU. In addition, Petrobras sold 3.24 million cubic meters of gas a day for June delivery at an average price of $4.25 per BTU.
Petrobras created the auctions as a way to sell excess gas in the company's pipeline system. The short-term contracts will allow the company greater flexibility to meet demand, the company said previously.
A combination of factors has crimped demand for natural gas in Brazil to start 2009, leaving Petrobras with excess supply.
Heavy rainfall earlier this year left reservoirs in Brazil's hydroelectric system at high levels, damping demand for electricity at gas-fired power plants. Slumping international oil prices also made fuel oil a cheaper alternative for local industry.
The slide in domestic natural gas consumption started just as Petrobras ramped up imports of liquefied natural gas and installed two regasification plants. The company has also curtailed imports of natural gas from neighboring Bolivia.
-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; jeff.fick@dowjones.com
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