The increase in LNG operations by Brazilian companies has made LNG a relevant component of the Brazilian natural gas (NG) matrix, integrating the country more deeply into the global energy market. As a result, Brazil becomes increasingly exposed to international price dynamics and supply fluctuations in global energy commodities such as NG [1]. Although Brazil does not depend directly on Russian gas supply, it remains indirectly affected by global disruptions in NG availability and pricing [2].

In 2022, Europe’s efforts to reduce dependence on Russian gas led to an increase in long-term LNG contracts. In response to the global tightening of the NG and LNG markets, suppliers began increasing the weight of oil indexation in new contracts to guarantee price stability, creating a more challenging scenario for the development and liberalization of the Brazilian LNG market [3]. At the same time, the growth of LNG imports by Brazilian companies contributed to aligning domestic NG prices with international benchmarks [3].

Imported LNG has become an important energy source for Brazil, particularly for intermittent electricity generation in the short and medium term through projects operating under Gas-to-Wire (GtW) and Reservoir-to-Wire (RTW) models. Considering both opportunities and constraints, LNG is increasingly evaluated as a strategic alternative energy source in the Brazilian energy system [4].

Despite this potential, the expansion of LNG markets in Brazil requires substantial investments across the entire supply chain. The implementation of LNG-based transportation systems, such as LNG-powered trucks or other alternative fuel technologies, demands simultaneous development of vehicles and fueling infrastructure, which significantly increases capital requirements. According to [5], establishing LNG refueling infrastructure across Brazil’s extensive highway network may become economically prohibitive, particularly under conditions of high international prices. Alternatively, compressed natural gas (CNG) trucks have already begun operating in Brazil, allowing LNG storage at refueling stations where cryogenic pumps enable high-pressure gasification and fueling operations, representing a more cost-effective solution in terms of CAPEX and operational expenditure (OPEX).

Fuel pricing for thermoelectric plants follows international market indexation rules, meaning that consumers ultimately bear the cost of fluctuations in global energy prices. In periods of market uncertainty and elevated energy prices, consumption tends to decline and industrial production slows down [6].

Brazil has experienced rising inflation in recent years, reaching levels not observed for a long time, while bank interest rates have increased significantly. These developments have contributed to higher fuel and food prices, reducing the country’s economic growth prospects [2]. Because NG is a key input in the production of fertilizers imported from Russia and widely used in Brazilian agriculture, disruptions in global gas markets have significant implications for the national food supply chain and agribusiness sector. As highlighted in [6], low-income countries are particularly vulnerable to rising food prices, which are exacerbated by increases in energy and fertilizer costs.

In emerging economies such as Brazil, where food, energy, and housing expenses represent a large share of household budgets, inflation has severe social consequences. Rising energy and food prices delay economic and social progress and increase poverty among vulnerable populations [6].

Although rising commodity prices have generally harmed Brazilian imports, certain developments have produced mixed outcomes. For instance, the embargo on Russian diesel in February 2023 [7] potentially opened opportunities for Brazil, as Russia sought new markets after losing European demand. However, in September 2023 Russia announced temporary restrictions on diesel and gasoline exports, directly affecting Brazil, which had become the largest importer of Russian diesel. This measure led to price increases from approximately USD 10 per barrel to USD 40 per barrel [8]. By the end of 2023, Brazil had become the largest buyer of Russian diesel, surpassing Türkiye and France [9].

For countries that rely on energy imports, higher fuel and electricity prices negatively affect industrial output and increase production costs, weakening national macroeconomic performance. Rising energy prices also reduce household purchasing power by increasing the cost of living through inflation. Conversely, energy-exporting countries benefit from higher commodity prices through increased revenues, expanded production, and greater investment opportunities. This dynamic contributes to a redistribution of wealth within the global economy and can exacerbate inequalities between nations [10].

As energy prices continue to rise, industrial supply chains become increasingly dependent on energy costs. This situation may trigger the relocation of industrial production from high-cost countries to regions with lower energy prices, encouraging investors to favor energy-advantaged economies [6]. Additionally, global uncertainty often drives investors toward safer assets such as US equities, the US dollar, and gold. This shift can negatively affect investment prospects in Brazilian industries and influence stock market performance both domestically and internationally [2].

Global trade flows are also undergoing structural adjustments. Importing countries are increasingly prioritizing domestic energy resources to reduce exposure to volatile international markets and improve energy security [6]. Nevertheless, importing countries remain vulnerable to supply strategies adopted by exporting nations. Therefore, strengthening domestic energy production, whether renewable or fossil-based, remains essential for long-term energy security.

Brazil’s energy matrix is largely based on domestic production, particularly renewable sources, along with oil and NG production from pre-salt and post-salt fields. However, LNG imports play an important role in supporting electricity generation, particularly during periods of reduced hydropower output. Petrobras has developed regasification terminals to receive imported LNG and supply thermoelectric plants during drought periods affecting hydroelectric generation [11]. Studies evaluating a decade of LNG regasification operations in Brazil confirm the importance of NG as a complementary energy source to hydropower, a trend expected to continue in the coming years [11]-[13].

Brazil has also followed the global trend of increasing electricity generation from natural gas-fired power plants. This transition contributes to reducing greenhouse gas emissions compared with coal-based generation while providing dispatchable and controllable electricity, which is more reliable than intermittent renewable sources such as wind and solar [14].

Although the Brazilian NG market is evolving gradually, state gas distributors have intensified efforts to diversify their supply sources and reduce dependence on Petrobras [15]. According to studies conducted by the consultancy Gas Energy based on contracts disclosed by the Brazilian National Petroleum Agency (ANP), new suppliers have offered gas at prices below those historically charged by Petrobras, providing evidence of increasing market competition [15].

For example, in 2022 the private producer 3R sold NG to the state distributor Bahiagás at prices between USD 6 and USD 7/MMBtu, based on Brent oil prices ranging from USD 75 to USD 125 per barrel. During the same period, Petrobras sold gas to distributors at prices above USD 14/MMBtu [15]. Such contractual disputes are common during the early stages of market liberalization, as traditional supply models coexist with new competitive arrangements.

Despite these changes, Petrobras remained the dominant supplier of NG to state distributors in 2023. Its pricing formula continues to be indexed to Brent crude oil prices and exchange rate fluctuations between the US dollar and the Brazilian real [15].

With the progressive opening of the Brazilian gas market, supply risks have increased for market participants, reinforcing the strategic importance of LNG. LNG provides flexibility and the ability to supply large volumes of gas to regions not connected to pipeline networks, particularly in southern and northeastern Brazil [1] and [11]. Several new LNG terminals are planned in these regions to support industrial consumption and electricity generation [1]. Some projects are already well advanced, including a terminal planned in the state of Paraná by the company Nimofast, representing a practical example of market liberalization [3].

In addition to LNG imports, Brazil relies on the Bolivia–Brazil gas pipeline (Gasbol) for NG supply. However, Bolivian gas production has been declining since 2015 due to limited discoveries and aging fields, raising concerns about the long-term reliability of this supply source [16]. If new discoveries are not made, Bolivia may eventually become a gas importer, affecting Brazil and Argentina, the largest consumers of Bolivian gas [15].

In response to these challenges, Brazil has renewed its efforts to strengthen energy cooperation with Argentina. The development of unconventional gas resources in the Vaca Muerta formation could enable Argentina to become self-sufficient and potentially export gas to Brazil in the future [15]. Increased production from Vaca Muerta may also allow Bolivian gas currently exported to Argentina to be redirected to Brazil later in the decade [17] and [18].

These evolving regional dynamics, combined with global LNG market volatility, are reshaping Brazil’s energy strategy. Buyers around the world are reevaluating long-term LNG contracts in response to price fluctuations and supply risks, while new infrastructure projects aim to expand LNG distribution networks and improve energy security [17]-[21].

The increase in LNG prices has had a significant impact on Brazil, causing a shift in its energy model towards this product, as well as the possibility of becoming an LNG exporter. The rise in prices justifies the investment in LNG production, which comes from offshore platforms exploring and producing from Brazil’s pre-salt reserves. At this point, another conclusion drawn from the study is the use of small-scale structures for LNG production offshore, such as SSM-FLNG, which fit the dimensions of NG production from pre-salt basins, as well as the size of specific demand from Brazilian consumer markets. This could also generate financial viability by taking advantage of high LNG prices, enabling Brazil to export LNG and thereby position the country among the world’s leading LNG producers and exporters.

Currently, Brazil’s NG matrix depends on Bolivian gas and LNG imports to balance its energy needs. However, there could be a surplus of NG from the pre-salt reserves once an economically viable solution is developed. Alternatively, a hybrid scenario could be explored, where, even with LNG imports, Brazil becomes an LNG exporter from its pre-salt reserves. This is possible because the production is offshore, far from the coast, as seen on pre-salt platforms. In this scenario, the offshore production could be transformed from NG into LNG, transported to the coast, and then reprocessed into NG again for consumption.

Brazil’s energy strategy, as detailed in the Ten-Year Energy Plan 2031, aims to double the share of NG in the national energy mix from 7% to 14%. While renewables dominate the grid, NG is expected to account for over 50% of new power capacity additions this decade, serving as a flexible, dispatchable complement to intermittent sources.

LNG is emerging as a critical alternative to diversify Brazil’s supply due to main factors such as the lack of centralized coordination for cross-border or interstate pipelines, which makes LNG a more flexible option for regional diversification, and shifts in global gas dynamics, exacerbated by the Russia-Ukraine conflict, have created a unique opportunity for Brazil to turn its abundant offshore reserves into exportable products.

Challenges in Pre-Salt Monetization: Despite high gas-to-oil ratios in the pre-salt layers, monetization remains difficult due to extreme water depths (3000 m), rock depths (7000 m), and distances from the coast exceeding 300 km. Historically, operators have prioritized gas reinjection to maintain reservoir pressure, but long-term recirculation threatens field profitability. Furthermore, high CO₂ levels in these fields necessitate advanced decarbonization solutions rather than simple venting.Floating Liquefied Natural Gas (FLNG) Solutions: This research identifies FLNG platforms as an innovative solution for outflowing offshore gas, particularly because they can be relocated as wells deplete. Large-scale projects like Shell’s Prelude (3.6 MTPA) and Petronas’ PFLNG serve as benchmarks, though Prelude initially faced significant cost overruns and delays. This study argues that massive projects like Prelude are incompatible with Brazil’s economic reality; instead, it proposes unprecedented, smaller-scale FLNG solutions tailored to domestic market growth and potential international insertion.Current Pipeline Infrastructure: Existing infrastructure for utilizing pre-salt gas is currently limited to three primary routes. Estimates suggest that the existing and under-construction pipeline capacity will reach its limit by 2026, making alternative monetization options like LNG technically and economically essential for future production volumes.

According to [22], the Búzios Field holds the largest volume of oil and gas in deep waters globally, spanning 852 km² and located approximately 200 km off the coast of Rio de Janeiro, at water depths ranging from 1600 m to 2100 m. Pré-Sal Petróleo S.A. (PPSA), Brazil’s state-owned company managing pre-salt reserves, announced on April 15, 2024, that the field had produced 1 billion barrels of oil. Petrobras operates the field through a consortium with CNOOC and CNODC, while PPSA manages the contract. Production has been ongoing since 2018 from five operational units of the FPSOs P-74, P-75, P-76, P-77, and Almirante Barroso [23].

The Búzios field is expected to operate at its maximum with twelve FPSO-type platforms. Currently, five platforms (P-74, P-75, P-76, P-77, and FPSO Almirante Barroso) are already installed and operational. Another six were in the design or implementation phase (FPSO Almirante Tamandáré, P-78, P-79, P-80, P-82, and P-83).

The Búzios FPSOs are among the most prominent production units in operation in Brazil. Búzios concentrates the most productive wells in the country. The field had already broken records in July 2023, with 680,000 barrels/day of oil and 30 million m³/day of NG.

The last unit to begin operations was the FPSO Almirante Barroso, which started in May 2023. This unit can produce up to 150,000 barrels/day of oil and 6 million m³/day of NG. The FPSO Almirante Tamandáré will be the largest producer on the Brazilian coast, with a planned capacity of 225,000 barrels/day of oil and 12 million m³/day of NG.

When the FPSO supplies NG to the FLNG, it is assumed that all necessary processing of the raw gas into primarily methane (CH₄), free of impurities and other components such as gas liquids, has already been completed by the FPSO. Currently, only some FPSOs in the Búzios field have these characteristics, known as Theoretical Type 1 FPSOs [24]. For the P-80, P-82, P-83, and the future Búzios 12 FPSOs, the Theoretical Type 1 FPSO configuration will be used to enable gas export and provide access to the natural gas consumer market, as they are expected to connect to the existing gas pipeline network.

The proposal for an offshore gas hub is conceived as a central point for the aggregation and processing of natural gas, aiming to improve interconnection and increase flexibility in the gas evacuation network. Its main objectives include optimizing the utilization of existing and planned gas processing and transportation capacities, as well as offering a competitive alternative to gas reinjection or to the individual processing that would otherwise be carried out on each FPSO.

The implementation of a new platform in the Búzios field, which would be an additional FPSO unit in pre-salt field, has been mentioned by Petrobras as specifically intended for the creation of a new gas hub in the pre-salt region [25] and [26]. This hub would be responsible for processing gas produced by surrounding platforms, centralizing a function that was previously distributed among individual production units [27] and [28]. This conceptual solution can be better understood through Figure 1.

The shared hub model represents a significant operational and economic shift. Instead of each FPSO requiring its own complex gas treatment and evacuation systems, multiple FPSOs could focus primarily on oil production, while only the hub platform would be dedicated to centralized gas processing. This approach, according to studies by EPE, could result in approximately a 35% reduction in CAPEX for individual production platforms since gas specification systems would be concentrated at the hub [29].

Gas processing with high CO₂ content is a well-known challenge in the pre-salt region [30], and the development of Petrobras’ HISEP technology for subsea CO₂ reinjection demonstrates both the complexity of the issue and the need for efficient treatment solutions. This hub could overcome the inherent limitations of individual FPSOs, particularly those that were not initially designed for extensive gas exports, as well as those already connected to the evacuation network that is currently operating near its capacity limit [26]. The hub concept represents a viable alternative for monetizing potential gas volumes, highlighting its applicability to large pre-salt fields such as Búzios [29]. It offers a flexible, faster, and often more environmentally conscious alternative for monetizing remote, smaller, or isolated gas reserves when compared with traditional pipeline infrastructure.

Source: Prepared by the authors with the help of AI technology, 2026.

Figure 1. Representation of the hub platform receiving natural gas from various FPSOs and delivering it to SSM-FLNG.

Small-scale floating units offer several attractive economic advantages, including faster time-to-market, inherent scalability for phased expansion, and reduced dependence on fixed infrastructure. Furthermore, the ability to redeploy FLNG units to new gas fields enhances asset utilization and value. However, challenges remain, notably the substantial initial capital investment required, the inherent complexity of offshore projects, and the operational difficulties associated with offloading operations in challenging offshore environments.

The transition from a paradigm in which individual FPSOs manage their own associated gas (often resulting in reinjection due to localized constraints) to a shared offshore gas hub model [31] represents a fundamental shift toward systemic optimization across the entire Brazilian gas value chain.

This study uses the case of Búzios field, in the Brazilian pre-salt, which is the largest oil and gas field in Brazil, with production projections of up to 2 million barrels per day (bpd) and colossal volumes of associated natural gas [32]. The efficient monetization of this gas is a strategic imperative, especially given the potential saturation of existing and planned pipeline infrastructure.

For the development of this study, the studies prepared by [33]-[35] use an economic-financial model, implemented in spreadsheets, to evaluate the feasibility of an offshore SSM-FLNG unit focused on gas monetization. This model served as the basis for the present work, which advances the analysis by incorporating an offshore natural gas hub solution into the modeling framework in order to obtain the results explored in this study.

This tool enables the economic and financial evaluation of the proposed SSM-FLNG, a small-scale, modular floating platform for natural gas processing and LNG generation. The modeling assumes that this FLNG will receive natural gas with a purity level suitable for liquefaction, with all pre-processing performed by an adjacent FPSO. The oil and gas production data for the Búzios FPSOs used in this modeling are obtained from the Environmental Impact Study/Environmental Impact Report (EIA/RIMA) prepared by Petrobras for [24][36]-[39], ensuring a robust and regulatorily validated database, as well as from actual production data available on the ANP’s production dashboard [40].

To evaluate attractive ranges that yield positive results, this study simulated the extreme limits of certain variables while maintaining the evaluated indicators at a level attractive enough to justify the use of SSM-FLNG platforms.

This section presents and analyzes the results of the economic evaluation of hub NG with the SSM-FLNG configuration, obtained through a simulation model. The analysis highlights the positive results in terms of revenue, NPV, and EBITDA, and examines the impact of the input assumptions. Given the empirical nature of the research, presenting the data and elucidating the connections between them are crucial to offer a concise overview of the findings.

The simulation results demonstrate that the SSM-FLNG configuration added positive economic value, as evidenced by the economic viability indicators. The NPV and EBITDA were favorable, indicating the project’s attractiveness under the adopted assumptions. The resulting graphs below illustrate the contribution of each analyzed component to the overall revenue, NPV, and EBITDA, providing an aggregated view of their effect. This is presented as an additional contribution to the habitual oil production of the Búzios Field platforms during the production years from 2016 to 2055, covering 40 years of field production. Taxes and royalties on the calculated EBITDA were not considered.

It is worth noting that the results without the inclusion of the NG hub modeling are identical to those presented in the studies developed by [33]-[35], with the gains modeled with the NG hub solution being included here.

The findings of this study provide a robust validation of the SSM-FLNG architecture and the integrated offshore NG hub as a transformative solution for Brazil’s pre-salt monetization. The developed economic modeling tool transcends specific case evaluations, offering a flexible methodological framework to analyze small-scale offshore structures across diverse global scenarios.

The economic simulations confirm that the SSM-FLNG configuration yields positive and robust results, outperforming conventional designs in several key metrics: the modular parallel array of 64 units achieves a total throughput of 4.48 MTPA, representing a 12% increase in collective processing capacity compared to standard 4.0 MTPA units. This higher volumetric efficiency correlates directly to an enhanced Net Present Value (NPV), as evidenced by positive IRR and EBITDA indicators. By reducing rigid infrastructure and transportation costs, the SSM-FLNG allows projects to deliver LNG at more competitive prices on the global market compared to traditional onshore sources.

A critical conclusion of this research is the necessity of the offshore NG hub platform. Currently, high CO₂ content and limited evacuation capacity force producers to rely heavily on gas reinjection. The proposed hub emerges as a promising solution to consolidate processing by: treating and processing gas from various FPSOs to reach liquefaction quality, the hub frees up critical capacity on individual production platforms; optimizing Capital Allocation so that the shared hub model redistributes CAPEX, making individual E&P projects more attractive and aligning with market liberalization objectives; and Future-Proofing Assets by avoiding the long-term costs of unnecessary reinjection, ensuring that pre-salt production remains competitive and sustainable.

In summary, the demonstrated viability of the SSM-FLNG and the integrated hub provides a promising roadmap for developing associated gas fields in remote deep waters where traditional pipelines are unfeasible. This innovation acts as a catalyst for economic efficiency, positioning Brazil to accelerate new projects and monetize gas assets previously considered marginal.

This research was funded by CNOOC Petroleum Brasil Ltd., through the Brazilian R&D levy regulation established by the Petroleum, Natural Gas and Biofuels Agency (ANP) (ANP’s Resolution nº 918/2023). The Brazilian Federal Agency supported a seminal PhD Thesis related to this research, named Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES).

We gratefully acknowledge the support of CNOOC Petroleum Brasil Ltd., and the strategic importance of the support given by ANP (Brazil’s National Oil, Natural Gas and Biofuels Agency) through the R&DI levy regulation (ANP Resolution n˚ 918/2023). The authors also gratefully acknowledge the seminal support from Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES). The present publication reflects only the authors’ views, and the scholarship’s sponsors are not liable for any use of the information contained here.