Ultra’s company has already entered distributed generation
Tabajara Bertelli — Foto: Claudio Belli/Valor
A few weeks after the acquisition of startup Stella and getting into distributed solar power generation, Ultragaz — the liquefied petroleum gas (LPG) distributor of Ultra group — made a new strategic move to consolidate itself as an energy company with a diversified portfolio. For R$165 million, the company purchased Neogás, a leader in compressed natural gas (CNG) distribution in the country, with an eye on the energy transition and the potential of the biomethane market.
Founded 22 years ago, Neogás was the pioneer in CNG distribution in Brazil and operates six compression bases installed in São Paulo, Rio de Janeiro, Paraná, and Rio Grande do Sul with an estimated production capacity of 100 million cubic meters per year, the same volume produced in 2021.
The distributor also has a fleet of 149 trucks, a customer portfolio complementary to that of Ultragaz, with large industrial consumers mainly far from the coast, and supplies 50 gas stations, in addition to providing logistics services to natural gas distributors.
“The main point [with the acquisition] is to unlock the biomethane market, which has a huge potential in the country,” Tabajara Bertelli Costa, CEO of Ultragaz, told Valor. Today, according to the executive, the domestic production of gas corresponds to only 3% of the potential.
As with the acquisition of the distributed generation startup, the strategy with Neogás is to take advantage of the strength of the Ultragaz brand and its broad commercial bases — over 58,000 companies and 11 million families served throughout Brazil — to offer new products and services to customers.
The expansion of access to natural gas and biomethane is expected to especially benefit industries that are more distant from pipelines and distribution networks. At the same time, by connecting biomethane producers — who are in landfills or near sugar and ethanol mills — and end customers, Ultragaz’s expectation is to accelerate the development of this sector.
“Distributed generation already exists and may be very relevant in the coming years. Now, the vision is to develop the biomethane production chain”, said Mr. Bertelli. Ultragaz’s plan, according to the executive, is not to become a producer of gas, although there may be some incursion of this nature to learn more about the technologies or to promote the value chain.
The intention, stressed the executive, is not to be a large producer of biomethane. It is necessary to know the technologies and better understand the market, eventually encouraging the production to ensure that the product reaches the market with a proper price. The focus, however, remains on the last mile. “The idea is to do the same thing that was done with LPG,” he said.
Although today the Neogás operation is concentrated in the South and Southeast, the ambition is to expand the supply to other Brazilian regions. Ultragaz has advanced conversations with customers that may result in the installation of compression stations, which by business logic should be close to the market, in new locations and, consequently, in new biomethane production centers. “Ultragaz brings logistical expertise,” said the executive.
While Stella is likely to remain as a subsidiary of Ultragaz, the plan for Neogás is to incorporate it in the future. From the beginning, the commercial area will be already integrated, according to the executive. The closing of the operation still depends on certain conditions, including approval by the antitrust watchdog Cade.
According to Mr. Bertelli, there is growing demand from customers for different types of energy, particularly those that meet the sustainability commitments made by companies. Another factor that will probably drive the market and the energy transition itself is the concern with supply security.
Ultragaz is still unable to measure the additional revenues from its latest acquisition. However, the company’s CEO says, there are several opportunities to be seized. “There is a lot happening in renewable energy, but we are looking at where we have a differentiated operation. The vision is to accelerate the energy transition process, and this way we are potentially building a new Ultragaz,” he added.
The Ultra group’s company had already been studying a renewable LPG, obtained from raw materials such as ethanol, biodiesel and chemical residues. The main challenge, according to Mr. Bertelli, is to reach a commercially competitive product. LPG of fossil origin can be transported in a canister. Through a partnership, the first BioGLP flame in the country was produced in 2021. The next step will be to check the commercial viability.
*By Stella Fontes — São Paulo
Source: Valor International