Abstract: Natural gas market in Brazil is still underdeveloped, answering for only 7.5 % of the energy matrix, especially in industrial, thermoelectric and automotive segments. Natural gas supplied by distribution pipeline networks brings economical and technical advantages for consumers when compared with other fuels available, and has gradually amplified its market share.
Transporting CNG, i.e., compressed natural gas stored in pressure vessels transported by trucks, is becoming an important market developer in Brazil, especially for markets not supplied by gas distribution networks. It can be strategically applied to supply natural gas earlier, inducing the anticipation of equipment conversions in industry and vehicles and introducing the culture of natural gas use at the supplied area. These areas are generally located between 50 and 250 km from existing gas distribution networks.
The enlargement of a previously sub developed market with CNG intends to raise natural gas daily consumption to a level that allows a gas pipeline network to be feasible. Once the supply of natural gas by pipeline network has been established, CNG transportation infrastructure can be relocated to a new CNG project, enabling another area to be developed. In that way, amortization continues on investment flow and no extra infrastructure expanses are required, thus applying the concept of "moving boundary", i.e., expanding the limits of the local gas distribution company network by CNG supply.
INTRODUCTION The construction of pipelines to supply natural gas to markets currently consuming other fuels poses considerable risks. Building the transportation infrastructure usually involves not only the risk of the investment itself, but also obstacles to the execution of the project, such as delays in obtaining environmental permits, land expropriation or the need to pass through urban areas with heavy population and traffic density. The delays can often make the project financially unattractive.
Any alternative means of transporting gas, requiring less investment and involving less risk and complication should therefore arouse keen interest, especially in a country like Brazil where the natural gas industry is still in its infancy.
The challenge is not just to service an existing demand for energy, but rather to displace traditional and well-entrenched competitors with mature logistical infrastructures. Natural gas has already proved its ability to displace certain of its competitors, not only due to its intrinsic qualities (environmental, calorific, less wear and tear on equipment) but also on price. That leaves the cost of transportation as the key determinant of the price of natural gas to the final consumer. Liquified natural gas (LNG) is a viable alternative for large volumes and distances, with possible application to medium-sized volumes and distances, whereas compressed natural gas (CNG) projects have proved to be viable in smaller markets relatively close to locations served by gas pipelines (less than 300 Km on average), successfully managing to displace higher value oil products such as gasoline and liquefied petroleum gas (LPG), as well as, in some regions, fuel alcohol.