Brazil's national oil and gas giant Petrobras announced on Friday that it had signed a contract to lease a thermoelectric power plant in Sao Paulo state for 17 years.

The company will pay 45 million reals (22.2 million U.S. dollars) a year to run the so-called Piratininga plant, which belongs to Sao Paulo's state government, according to a Petrobras statement.

The company highlighted the plant's operational flexibility, citing it as one of the reasons that motivated the contract.

Another reason was the need to increase Petrobras' energy supplies in Brazil, the statement said.

The contract also gave Petrobras the option to acquire ownership of the power plant. It will be the 13th thermoelectric power plant run by Petrobras in the country.

The Piratininga plant had previously been operated by a consortium, of which Petrobras was a member up until 2001. Since then, the state-owned giant has been negotiating with the local government in order to take over the plant's entire operations.

The plant, which is located in the city of Sao Paulo, relies on a base production capacity of 540 megawatts, and on two extra steam-empowered engines that are capable of producing 200 megawatts.

Source: Xinhua