By Brazil Stock Guide – Petrobras (PETR4.SA) is assessing three potential routes for a 2,000-kilometer oil pipeline connecting its Paulínia refinery in São Paulo to a delivery hub in Mato Grosso, according to remarks by logistics executive Daniel Sales at the Rio Pipeline conference.
The project, which could exceed $2 billion in investment, would be the company’s first new oil pipeline since the São Paulo-Brasília line inaugurated in 1996. Petrobras sources said the final destination may range from Rondonópolis in the south to Sinop in the north, depending on market demand and environmental licensing hurdles, according to Agência iNFRA.
One option under review is using existing rights-of-way along the Bolivia-Brazil gas pipeline to shorten licensing timelines, seen as the main bottleneck. Industry estimates put the total cost at $2.5 billion to $3 billion, reflecting average construction expenses for a project of this scale.
Sérgio Bacci, head of Transpetro, the Petrobras subsidiary that builds and operates pipelines, said the initiative will not appear in the company’s next strategic plan covering 2026 to 2030. Still, Petrobras CEO Magda Chambriard has asked Transpetro to strengthen logistics to the Center-West, suggesting an accelerated schedule remains possible.
“The fuel market in the Center-West is growing at Chinese rates—8%, 10%, 11% annually. A mature market with that level of demand requires mature logistics,” said Bruno Ebecken, Transpetro’s executive manager. “That means more reliability, lower costs and greater efficiency, all of which the pipeline can provide.”
Currently, Petrobras relies on a mix of trucks and railways to supply the region. In 2023, it opened a distribution base in Rondonópolis, followed by another in Rio Verde, Goiás, in 2024. The company also signed a deal with rail operator Rumo (RAIL3.SA) to expand shipments to Mato Grosso. The new pipeline aims to replace this multimodal approach with a permanent solution.
Executives acknowledged pressure from the corn ethanol industry to build a return line toward the Southeast, as ethanol output in the Center-West already surpasses regional fossil fuel demand. “What goes down in ethanol from the Center-West is already greater than what goes up in fossil derivatives, and that’s an inefficiency,” Ebecken said. Petrobras is also evaluating increased capacity to handle vegetable oil for renewable diesel and sustainable aviation fuel.
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