The Brazilian National Agency of Petroleum, Natural Gas and Biofuels (“ANP”) enacted on July 31st 2014 the Resolution ANP 39/2014, which regulates the procedures to be adopted in bidding rounds for construction, expansion and operation of natural gas transportation pipelines under concession contracts.

The granting of concession contracts for the transportation of natural gas through pipelines has been established by the Law 11,909/2009, the so-called  Gas Law. However, even with the enactment of a regulatory decree in 2012 (Decree 7,382/2010), there was still no specific regulation about the bidding proceedings to be adopted.

The Resolution 39/2014 provides for the publication of a preliminary tender protocol, as well as the holding of a public hearing to present the pipeline and the applicable rules, and to allow the submission of comments by any interested entity.

The tender protocol must be published with a minimum 45 days prior to the date scheduled for submission of bids, and must contain the route of the pipeline, the concession term and the minimum local content index required. As already anticipated in the Gas Law, the winning bidder will be determined based on the lower annual revenue.

Companies or consortium of companies interested in participating in the bidding round must submit the registering documentation required by ANP and pay a participation fee, which will grant access to a technical data package about the pipelines.

The bidding round will be composed of two stages. The first for evaluation of the financial bids and the second for analysis of the technical bid. The winning bidder will be the one with the best financial bid and whose technical bid and qualification are approved.

The qualification criteria shall be defined in the tender protocol with the purpose of evidencing the legal, fiscal and labour good standing of the bidders, as well as their economical-financial and technical capacity.

For execution of the concession contract, the winning bidder  must present the applicable guarantees and incorporate a specific purpose enterprise (SPE) with headquarters and management in Brazil.

The full text of Resolution 39/2014 may be found on the ANP website (document in Portuguese).