Originally published December 22, 2010

Keywords: Brazil, 2009 Gas Law, natural gas

On December 2, 2010, the President of Brazil issued Decree No. 7,382 (the Decree) establishing several rules under Law No. 11,909 (the Gas Law), which regulates natural gas activities in Brazil.

The Decree, which was enacted one day after the approval of the new regime for the exploration of the pre-salt reserves, provides rules for transportation, handling, processing, storage, liquefaction, regasification and trading of natural gas.

Among other things, the Decree provides: (i) the rules for access to the gas transportation activities upon the concession regime or issuance of authorization; (ii) the creation of the Ten Year Plan for Expansion of Gas Pipeline (Pemat), to be issued by the Ministry of Mines and Energy; (iii) the rules for third-party access to gas pipelines; (iv) the natural gas swap; and (v) the rules applicable to the exclusivity period of gas pipelines, which shall be at most 10 years.

The Decree enhances the enforceability of the Gas Law by structuring the new regulatory framework. However, the Decree does not establish the rules related to gas supply contingency, which shall be regulated later.

Observations in this update about Brazilian law are by Tauil & Chequer Advogados. They are not intended to provide legal advice to any entity; any entity considering the possibility of a transaction must seek advice tailored to its particular circumstances.

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This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.