Brazil's largest integrated energy firm,
Petroleo Brasileiro SA
) has brought online its third LNG (liquefied natural gas)
Regasification Terminal in the state of Bahia. The 14 million
cubic meter/day terminal added the first produce to the Brazilian
gas pipeline network on Jan 24.
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Construction of the Bahia Regasification Terminal (TRBA) started
in 2012 and required an investment of approximately R$1 billion.
Contribution from this new terminal has increased Petrobras'
natural gas regasification output to 41 million cubic meter/day.
Previous regasification ventures of Petrobras include the
terminals at Pecém and Guanabara Bay. The terminals have
regasification capacity of 7 million cubic meter/day and 20
million cubic meter/day, respectively.
Petrobras believes that the increased regasification capacity
would support the nation's natural gas needs.
Petrobras' activities include the exploration, exploitation and
production of oil from reservoir wells, shale and other rocks,
and in the refining, processing, trade and transport of oil and
oil products, natural gas and other fluid hydrocarbons, in
addition to other energy-related activities. The Brazilian state
run energy major has a promising long-term outlook thanks to its
strong pipeline of development projects and impressive
However, we believe that the company's $237 billion five-year
investment program could substantially increase its leverage and
deteriorate credit metrics during the current downturn in the
economic cycle. Additionally, the company's declining production
trend is a concern.
Headquartered in Rio de Janeiro, Petrobras currently holds a
Zacks Rank #3 (Hold), implying that it is expected to perform in
line with the broader U.S. equity market over the next one to
Meanwhile, one can consider better-ranked energy sector stocks
Swift Energy Co.
Profire Energy, Inc.
Clayton Williams Energy, Inc.
). All these stocks currently sport a Zacks Rank #1 (Strong Buy).