Case Study
National fuel distribution network optimization to prioritize infrastructure investments in Brazil
A leading Brazilian oil, gas and biofuels sector association used a national-scale model to prioritize infrastructure investment, supporting 28 recommended projects and identifying BRL 8.8 billion in required logistics investment.
Client
-
A leading sector association representing the oil, gas, and biofuels industry in Brazil, acting as a key reference point for strategic discussions on infrastructure, supply security, and market development in the country.
Challenges
-
The client needed a robust analytical model to assess the future adequacy of Brazil’s fuel and biofuels logistics infrastructure under different supply and demand scenarios.
-
The analysis required a fully national view of the distribution network, covering demand fulfillment across more than 5,500 municipalities and incorporating the main transport and storage assets used in the country.
-
It was also necessary to compare current and future flows across ports, pipelines, cabotage, inland waterways, railways, and roads in order to identify bottlenecks, quantify required investments, and prioritize the most value-accretive projects.
Our Approach
-
Development of a National Optimization Model to represent the end-to-end fuel and biofuels distribution network in Brazil, including supply, demand, production, import flows, and multimodal logistics infrastructure.
-
Modeled the main logistics corridors and assets across the country, incorporating ports, pipelines, cabotage, inland waterways, railways, and road transport, as well as the relevant operational capacities, berth constraints, flow limits, and route alternatives.
-
Simulated long-term scenarios for diesel, gasoline, naphtha, LPG, jet fuel, ethanol, and biodiesel, comparing future flows versus available capacity to determine additional production and logistics infrastructure needs and to prioritize investments nationwide.
Results
-
The model supported the recommendation of 28 infrastructure projects in 2018, of which 20 had been completed or were in progress by 2026, indicating strong validation of the analytical framework.
-
The client's published study highlights the need for BRL 8.8 billion in direct logistics infrastructure investments and indicates potential annual distribution cost reductions of BRL 2.0 billion, reaching BRL 2.6 billion under tax simplification, while also reducing transport emissions by 15%.