Petrobras – Investor Relations

Petrobras

Investor Relations

Charter agreements for natural gas regasification

(Rio de Janeiro, April 20, 2007). – PETRÓLEO BRASILEIRO S/A - PETROBRAS, [Bovespa: PETR3/PETR4, NYSE: PBR/PBRA, Latibex: XPBR/XPBRA, BCBA: APBR/APBRA], a Brazilian international energy company, announces that its Executive Board approved today the contracting of Golar LNG Ltd for the charter of two ships for the LNG (Liquefied Natural Gas) terminals located at Guanabara Bay, Rio de Janeiro, and Pecém, Ceará. The two Regasification and Storage Floating Units can also be used to transport LNG. One of the units will have the capacity to regasificate up to 14 million cubic meters per day (m3/d) of gas, and the other, up to 7 million m3/d. Both will be able to operate in any of the terminals. The first one is scheduled to  come on stream in the first half of 2008. The charter cost of the two ships will total approximately US$ 90 million per year, including operating expenses.

The LNG Project is the best technical and economic solution Petrobras found to make gas supply flexible, both in the short and long-terms, making natural gas available to Southeastern and Northeastern Brazil and ensuring Thermoelectric Plant reliability. The project allows input purchase parcelling adjusting to effective demand progress, as the trend of greater thermoelectric plant use during the Brazilian dry season (May to October) is concomitant with the lowest demand for LNG in the international market.

The ships will be moored to an island-type pier (Guanabara Bay) and to an existing pier (Pecém).  Both will be installed in sheltered waters, close to the transport network and to consumer markets. A pipeline will connect the pier to the coast, where the natural gas transport line will be integrated into the company’s gas pipelines system, and will be supplied by supply vessels.

Essentially devoted to  meet thermoelectrical flexible demand, the Guanabara Bay LNG Regasification terminal will be located close to three large plants (Barbosa Lima Sobrinho, Leonel Brizola and Mário Lago). The Pecém terminal, besides supplying the thermoelectrical plants (TermoFortaleza, TermoCeará e Jesus Soares Pereira), will also supply part of the Northeastern industrial market.

This project marks the insertion of Brazil and the entry of Petrobras into the LNG market and is aligned to the company’s strategic objectives: to increase the supply flexibility of the Brazilian natural gas market for the thermoelectrical generation needs, diversify the input supply sources and anticipate the development of this market.

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