By Brazil Stock Guide – Brazil’s oil and gas regulator ordered Petrobras (PETR4) to upgrade its Caraguatatuba gas-processing plant so all natural gas meets a minimum methane content of 85%, ending years of special exemptions granted for pre-salt production.
The National Petroleum Agency, or ANP, unanimously approved the measure on Tuesday (18), according to Agência iNFRA, establishing an eight-month extension of the company’s existing waiver to avoid supply disruptions while the upgrade is implemented.
Under the decision, Petrobras must submit an adaptation plan for the Caraguatatuba Gas Treatment Unit, known as UTGCA, within three months. The ANP’s technical staff will have an equal period to evaluate the proposal, followed by a two-month window for the board to issue a final ruling. The regulator’s superintendencies will also set a deadline — within six months — for Petrobras to complete the required structural changes.
The ruling introduces additional costs long deferred by the state-controlled producer. Director Daniel Maia led the process, but the final terms were shaped by interventions from board member Pietro Mendes, who incorporated technical demands raised by the ANP’s Production Development Superintendence (SDP).
According to Mendes, the regulator determined that “Petrobras did not succeed in demonstrating any effective technical-economic impossibility to adapt the UTGCA,” which led the technical staff to interpret the situation as an intentional “postponement of investments.” He also highlighted that existing technology allows for more efficient removal of heavy fractions, raising methane levels and maximizing recovery of high-value components such as LPG.
Director Fernando Moura called the SDP analysis the “most forceful technical position in the process.” He emphasized the UTGCA’s strategic potential to receive gas from future projects, including Bacalhau operated by Equinor (EQNR), Orca led by Shell (SHEL), and Petrobras’s own Aram exploration block. These developments, he said, underscore the long-term need for infrastructure that can handle varying gas compositions.
ANP Director-General Artur Watt supported the decision and stressed the importance of expanding domestic LPG output. Brazil still imports the fuel, and demand is expected to rise under the federal Gás do Povo initiative, which supplies low-income households with free cooking gas.
The move formalizes the phaseout of lenient specifications long granted to pre-salt flows and signals a regulatory shift requiring Petrobras to modernize processing assets while ensuring higher calorific standards across Brazil’s natural-gas market.
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