Well, good morning, everyone. Thank you for participating at Eneva's fourth quarter 2023 earnings conference call. We'll start with slide 4 and the main highlights we had in the period. We've had a strong quarter operationally, with significant advances in our strategy and record revenue, which translated into an EBITDA of BRL 1.036 billion, 84% increase compared to the same period in 2022. This result is the fruit, the result of initiatives we've been working hard all over the year, and the operational readiness of our assets, which continue to contribute to the stability of the Brazilian electricity system. In this context, we should highlight the conclusion of the stabilization for the Azulão -Jaguatirica integrated project plant in the Futura One Solar Complex, which reached 100% availability throughout the fourth quarter.
The growth in fixed and variable margins reflecting our financial optimization and operational efficiency initiatives, which culminated in significant reductions of more than BRL 180 million in our O&M costs in the company's SG&A. The return of the regulatory thermoelectric dispatch to serve the interconnected system, even in a context of overflow supply of hydroelectric power in still high reservoirs levels. This dispatch, requested by the system operator, met daily and hourly load peaks that cannot be met by renewable sources. These events increasingly reinforce the importance of the availability of thermoelectric plants for the national energy system, not only to supplement generation according to the seasonality of the hydrological regime, but also as a major stabilizer of the growing intermittency in our system.
This result was reflected in our leverage, as measured by the net debt over EBITDA, which was reduced to 3.99x at the end of December 2023, a milestone in the company's deleveraging trajectory, which accumulated a reduction of 0.8 times in the year of 2023. In addition to that, at the beginning of the year, our Parnaíba plants resumed exports to Argentina, for some period throughout January and February 2024, due to the high temperatures observed in our neighbor. This is a window we intend to explore throughout the year as new opportunities arise, particularly in the winter months or during the summer heat spikes. The last quarter of 2023 was also marked by important progress on other fronts.
In the Azulão 950 project, as well as progressing in the contracting and construction of the project, which is on schedule, we closed financing contracts totaling BRL 1 billion, with incentivized credit lines at extremely competitive costs. At the Futura I Solar Complex, we signed another contract in the self-production modality, selling the energy at SP Futura 5. With this, we have secured the contracting of 84% of the complex energy from 2024 onwards in very long-term contracts, with reference customers in a duration between 12 and 19 years. In addition, in February this year, we entered into an innovative partnership with Virtu GNL and Scania in Brazil to implement an LNG-fueled logistic corridor for long-distance, heavy road transportation in the vicinity of the Parnaíba Complex.
This will be the first blue Corridor in Brazil, with the intention of replacing diesel, reducing CO2 emissions and pollutants such as NOx and SOx and particulates. This pioneering sustainable project opens up yet another monetization front for our growing reserves, growing gas reserves, and creates a value chain and yet another alternative for allocating capital. We believe this is an avenue with great potential, since it requires modular investments, has a volume guarantee, and offers attractive margins for our gas. Later, Marcelo Lopes will give you some details about this project. Also, on the commercial front, we launched our gas desk with signing of marketing agreements from the Sergipe Hub, which will be the first private LNG terminal connected to the gas transportation network. The aim is to make the most of the hub's potential, offering flexible, liquid, and secure solutions for the market.
Finally, last week, the Ministry of Mines and Energy published a public consultation on the 2024 capacity reserve auction. Eneva has existing assets and expansion projects that are ready in incentivized regions which have access to proprietary gas reserves and supply infrastructure that make our offer extremely competitive for the auction. We are truly motivated by this opportunity, and we are already working hard to ensure the monetization of a new cycle for our assets in the Parnaíba complex, and to contract to contract new projects in this capacity reserve auction, which will centrally ensure the generation of additional value for the company and our shareholders. Moving on to slide number 5, I'd like to present the progress of our exploration campaign.
As we can see in the graph, in the chart at the top, our E&P team has been delivering consistent results year after year, reflecting a consistent increase in our natural gas reserves, even with annual consumption over time. This growth in reserves is crucial to ensuring the longevity of our current assets, enabling the growth of our assets base, and creating opportunities for the development of our new business models. In 2023, we once again were able to expand the Parnaíba Basin's total 2P gas reserves, jumping from 33.1 billion cubic meters to 37.6 billion cubic meters at the end of the year. The volume of reserves certified in 2022 already ensured the qualification of the Parnaíba I and III plants for the awaited Capacity Reserve Auction, opening up the possibility of contracting a new cycle for these plants.
Now, with the continued expansion of reserves in the Parnaíba Basin throughout 2023, we will intensify our efforts to develop our innovative business models. We will be focusing on marketing LNG as a substitute for diesel and heavy oil in the north of the country, in regions that are not served by transportation pipelines, particularly in the industrial and long-distance heavy logistics segments. Our offer is competitive and provides decarbonization avenues or possibilities for our clients. In the Amazon Basin, the total 2P reserves amounted to 10 billion cubic meters, a reduction compared to the 14.5 billion cubic meters that were certified by the end of 2022.
The extension wells drilled at the east of the ring fence of the Azulão Field in the eastern portion of the Silves Discovery Assessment Program, or PAD Silves, in the acronym of the ANP, did not confirm the best expectation of the geological models developed in 2022, resulting in a downward revision of this accumulation of 2P reserves. However, it should be clarified that only a portion of the Silves PAD has been evaluated, and we'll continue evaluating the western portion of this area, as well as evaluating opportunities in deeper areas and horizons within the ring fence of the Azulão Field. In 2024, efforts will be focused on updating the geological model of the Azulão Field and the Silves PAD, reflecting the well and test data obtained from the activities carried out throughout 2023.
We also plan to begin a seismic acquisition in areas of the Azulão Field, the field's PAD, and the Tambaqui Field and surrounding areas in order to define priorities of various prospects that have been identified, and it will be the subject of the exploratory drilling campaign that will begin early next year. It's important to emphasize here that with the current reserves and the wells that were already drilled, we are comfortable enough to produce the thermoelectric power complex in Amazonas in Roraima for a period of nearly 10 years, and we are already working to incorporate new reserves following the planning I've just described. Finally, you also have the additional potential for the Japiim marginal accumulation area, acquired in the ANP fourth permanent offer cycle by the end of 2023.
We will recomplete the well that was discovered in this accumulation and carry out long-term tests, seeking to define the potential of this field more precisely. With this planning, we are confident that we'll be able to replicate our successful track record in the Parnaíba Basin and the conversion of reserve values close to those previously estimated. Another relevant highlight for the quarter was the certification for the first time of light oil reserves in the areas under Eneva's concession, with the incorporation of hydrocarbon volumes in the Tambaqui field. Considering all the company's volumes of condensate and recoverable light oil, this volume that was certified by GCA reached 11.8 million barrels of 2P reserves in 2023, an increase of more than 100% compared to 2022, as shown in the chart.
I will now hand over to Marcelo Lopes, who will talk more about the 2024 capacity reserve auction.
Thank you, Lino. Good morning, everyone. Now let's move on to slide number 6. I'll present the main highlights of the auction so far. So first, the confirmation of the auction only reinforces the need to contract dispatchable power to guarantee the security of the system. This is necessary both to deal with the structural conditions such as ONS operating restriction, as well as the growing intermittency of the energy matrix, and also cyclical effects, such as temperature peaks caused by climatic events such as El Niño. On March 8, last Friday, the public consultation was open to collect contributions from agents to support the publication of the auction's definitive ordinance, which runs until March 28.
This ordinance provides for the contracting of three power products: two products for new and existing thermoelectric plants, and one product for the expansion of existing hydroelectric power plants. They will have two different periods of starts in July 2027, with seven years for thermal sources, and another in January 2028, which will last 15 years, for which we'll have agreements with two different products, allowing the participation of hydro and power plants separately. The date of this auction is August 30 this year. As Lino said, it will be a major opportunity for the company to recontract its existing assets, whose contracts will be valid till 2027, like Parnaíba I and III, as well and monetize new projects based on LNG power plant in Sergipe, where we have gas structures already available.
We'll make every effort to make sure we use these opportunities in the auctions as they... New documents to evaluate these auctions will also be making those available. Now, moving on to Slide 7, we introduce our new pioneering solution for using LNG in heavy road transportation. With the advances on the exploration front, we are working incessantly to develop new opportunities to monetize our natural resources and maximize the generation of value from our assets. To this end, we have entered into partnerships to develop a pioneering project, the creation of the first Blue Corridor in Brazil, with infrastructure to supply LNG-powered trucks. The rationale is to replace the use of diesel with LNG in heavy road transportation, with economic advantages contributing to the reduction of emissions for customers.
We have mapped our potential market for LNG for transportation in five clusters, up to 1,100 km from Parnaíba, where it could be possible to offer this service. So this new value chain represents yet another market for us to sell Parnaíba reserves, and also bring some advantages, such as more attractive margins on the sale of natural gas compared to the average monetization of the generation. Take or Pay contract, guaranteeing greater volume predictability, the possibility of implementing escalonated CapEx, lower need for CapEx, which can be scaled according to market development, making modular expansions of the liquefaction system in trains of 300,000 cubic meters per day of capacity, a reduction in the carbon footprint in heavy transportation, with lower volume of emissions and particulates as a result of replacing diesel with LNG.
For the pilot project, 180 LNG-powered mechanical road horses were purchased at Scania. Out of this, 30 horses are destined to GNL Brasil, our JV with Virtu, will be used on the delivery routes of the contracts with Vale and Suzano. The other 150 are destined for Virtu, which will offer a sustainable heavy transport service for large grain shippers, LNG-powered, and will buy the gas from Eneva's liquefaction plant at the Parnaíba Complex. At this time, it doesn't need any additional investment by the company. Well, moving on to slide 8, I would like to highlight the launching of our gas trading desk, with the signing of our first agreements to supply this gas in the Brazilian transportation system.
The launch of this will make possible to deliver 1.8 million per day, after meeting some preconditions made by this agreement. Natural gas will be offered from the Sergipe Hub, which will be the first private LNG terminal connected, or private terminal connected to the national gas transportation network. We will continue securing these assets and increasing our solutions and products that are very important for a market that looks for liquidity and more dynamic, which is the Brazilian gas market. This will be a connection between the consumption market and several possibilities of offering this molecule, which will optimize our natural gas and LNG possibilities.
From our position in the Sergipe Hub, which has the availability of a terminal to import and inject gas in the matrix, and a thermoelectric plant that can consume and remove this gas from the grid, we can offer the market these products. The first, which is readily available today, is the firm project, a firm commitment to delivery and pickup with take or pay. Number two, which is a product in which we tend to be very competitive, is a flexible product, with a commitment to deliver the quantity nominated by the buyer in 100% delivery or pay, with scheduling for receipt the following day. So meeting the needs, specifically, the flexibility need of the market.
And finally, we have the spot product, with a short-term delivery and withdrawal commitment, seeking price opportunities or the need for additional volume. We will try to have new agreements signed in this front to have more diversified and reliable sources, extracting the most of our assets and competencies, developing solutions to meet the needs of the market. Now I will hand over to Marcelo Habibe, who will present the evolution of our operational initiatives.
Thank you, Marcelo. Now, moving on to Slide 9, our financial discipline and expense management on several fronts were reflected in significant savings in yet another quarter. As you can see to the left, we had a nominal reduction of BRL 95 million in the total fixed costs of our operations, compared to the fourth quarter of the previous year.
It's important to note here that this reduction was made cautiously, without compromising the efficiency of our operations. With regards to the company's SG&A, savings amounted to BRL 121 million in the fourth quarter of 2023, mainly reflecting lower spending on consultancy and advisory services compared to 2022. Costs, these cost savings were accompanied to other improvements. With the in Jaguatirica, medium, availability was 94%, in Futura, 93.
... in the fourth quarter of 2023, rising to 99% and 96% respectively in January 2024. This due diligence and expense management and financial discipline is part of Eneva's culture, and we will continue to strive to increase our efficiency and value generation. Moving on to slide 10, I present a summary of UTE Fortaleza's contribution to generating value for Eneva. By the end of 2023, as planned, the plant's energy supply contracts were terminated, and with that, the UTE Fortaleza ended its first operational cycle. Despite the short time between the acquisition in August 2022 and the conclusion of its first cycle, I would like to highlight the asset's contribution in terms of generating value. As shown in the graph, we had a net outlay of BRL 169 million for the acquisition of this asset.
With just over 4 months in our portfolio, by the end of 2022, the plant had already generated BRL 160 million in cash, which was very close to the net amount disbursed by Eneva for the acquisition. In 2023, the plant still contributed around BRL 460 million in additional cash generation. As a result, the total cash generation net value of the acquisition amounted to BRL 456 million, an invested capital multiple of 3.7x. Furthermore, in addition to the significant cash generation, cash generation in the period from the asset, this acquisition did not add any debt to our balance sheet. We will evaluate newer possibilities to contract a new cycle for this asset through the sale of energy in auctions.
Moving on to slide 12, I will present the main impacts on EBITDA. Consolidated EBITDA grew by 84% in Q4 2023, vis-à-vis Q4 2022. As we see in the slide, Sergipe Hub and Fortaleza TPP contributed BRL 55 million to increase the EBITDA in the period, with growth in the fixed margin of both operations and reduction in the SG&A in the Fortaleza TPP. BRL 61 million came from Futura U m, Futura One, as a result of the operation of the complex in 2023. Jaguatirica II grew by BRL 62 million, which was driven by the increase in the availability and net generation, and the EBITDA of upstream grew by BRL 67 million, with a greater variable margin, in view of the reduction of variable costs, especially the government contribution in the period.
Additionally, coal generation contributed BRL 46 million to growth, which reflects the readjustment of the fixed contract revenue in 2023, and the ad hoc effect of the fee relating to the cancellation of the contract to supply coal, which was booked in Q4 2022. In terms of the holding, the positive variation by BRL 246 million was driven by the following factors: Lower SG&A, then we reviewed the fair value of certain long-term incentive programs of the company, and we've reversed expenses from previous quarters. And then we booked one-off expenses relating to M&A projects in Q4 2022, which didn't happen in Q4 2023. The negative variation by BRL 53 million in the trading company has to do with the MTM in this quarter relative to last year.
As a result of all these effects, the EBITDA of the company was in excess of BRL 1 billion in Q4 2023. On Slide 13, you see the main impacts of the consolidated financial results quarter on quarter. The net financial result was negative by BRL 1 billion in Q4, vis-à-vis negative BRL 395 million in Q4 2022. This variation in the period was explained by the booking of some ad hoc, non-recurring effects and non-cash effects. Firstly, the restructuring of the CELSE debt. We made early payments of the debt, and this reduced the costs of funding the original debt. This has created a negative impact by BRL 432 million, and again, with a non-cash effect. We had a positive impact by BRL 238 million, because we repurchased the debt at a lower amount.
The second effect, with an effect of BRL 370 million in the quarter, was an accounting effect with no cash effect. It arises from the reclassification of the fair value of the ventures after the early settlement of the contracted swaps in the second quarter of 2023. This negative variation was under fixed assets, as the swap was linked to debts relating to projects under construction. If we exclude these one-off effects, the financial result would be- would have increased by 13%, which reflects the classification of the financial results of projects which were under construction. And also the greater volume of total debt on an annual basis. The financial increase in expenses was partially offset by the greater revenue from financial investments in Q4 2023.
Moving on to slide 14, you see the main variations in the cash flow in Q4 2023. Despite the disbursement of investments and the debt flow in the period, at the end of 2023, our cash position was BRL 2.6 billion, practically stable relative to the amount in September. The effects that contributed to this variation were: the operating cash flow, BRL 933 million, driven by EBITDA in the period. The investment cash flow, we disbursed BRL 751 million in our construction projects, such as Azulão 950 and the liquefaction plant in Parnaíba. And we disbursed BRL 235 million to amortize principal, pay interest, and pay charter expenses.
Here, despite the negative result of the finance and financing flow, we restructured the CELSE debt with a positive impact of BRL 243 million in the flow. And if we consider the net effect of revenues and expenses, we mitigated against the negative flow. On slide 15, you see more details about our capital structure. First, you see the company's net debt, which was BRL 17 billion. The leverage has been reduced for the fourth time, and has improved, and went from 4.82x net debt over EBITDA to 3.99x in the fourth quarter of 2023. The other graphs show the profile and quality of our debt, which matures in the long term and is low cost. That is, it is linked to the IPCA.
In Q4 2023, the average maturity was 5.2 years, the duration, and most of the maturities are as of 2028. Now, I turn the floor over to Andrea, our new Director for Exploration Development and Construction, which joined us this year, and he's going to give you an update of our investments and the status of our construction projects. Good morning to all. On slide 17, we see the investments made by the company in the quarter, which totaled BRL 789 million, mostly in construction projects and the upstream activities in Parnaíba. In Azulão 950, in Amazonas, we invested BRL 376 million in the quarter, of which BRL 115 million were allocated to construction works and paid for milestones.
BRL 105 million were paid to the turbine manufacturers, BRL 83 million have to do with E&P activities, and BRL 58 million were invested in the construction of pipelines. In the gas liquefaction plants, which we are building in Parnaíba to serve Vale, Suzano, and other markets, we invested BRL 68 million, relating to the payments to the EPC contractor for reaching milestones, and BRL 27 million were paid for liquefaction equipment. In the upstream, we invested BRL 96 million in the quarter, of which BRL 56 million were invested in exploration to complete the drilling of the wells in Maranhão and Amazonas, and BRL 40 million went to the development of the Gavião Monteiro, Gavião Preto, Gavião Belo, and Gavião Real fields. Finally, in the Parnaíba VI Thermal Power Plant, we invested BRL 61 million to pay the EPC contractor services for BRL 54 million.
On Slide 19, I will give you an update about the small-scale LNG projects in Parnaíba. The project has 91% of adherence to the schedule, and 100% of the project has been contracted, and most of the equipment has been delivered. Especially, we have received and assembled the 12 tanks of the liquefaction plant. We have also assembled 32 cryogenic trailers, and we have received the equipment of the regasification plant in the Suzano facilities. In 2024, we are going to commission the last 4 cryogenic trailers in March. We are going to finish the electromechanical assembly of the liquefaction plant, and we are going to commission the liquefaction unit in the second quarter. The COD of the plant is estimated to happen in the second quarter of 2024. On Slide 20, I will give you the updates on the Azulão 950 project.
The physical adherence is 97%, and the physical progress is 18%. The civil construction works have progressed by 40%, and we have completed the pile driving, and also the power islands, and we have done the concrete work in the foundations. We have also signed the contract with the EPC contractor for the cluster pipeline and capturing packages. Additionally, we have completed the drilling of three more wells, which are going to be part of the system of production of gas. We have obtained the license to install the pipeline and the thermal power plant, and we estimate that the construction of the pipelines is going to start at the second quarter of 2024.
The main milestones are the planning for energizing the plants in Q4 2025, the COD of the single cycle expected in the beginning of 2026, and the COD of the combined cycle in the second quarter of 2026. The commercial operation is expected to start in Q4 of the same year. On slide 21, I will give you some updates on the Parnaíba VI project. This is in the final phase of construction and assembly, with a physical adherence of 99% and physical progress at 93%. We have completed the substation for 500 kV, which is now ready for energization, and we have carried out the tests of the engines in all the plant and the assembly of the automation panel.
In 2024, we should energize the transformer, we should carry out the hydrostatic test of the steam recovery boiler, and also start the operations at this in Q4 2024. The CCEAR is due in January 2025. And I'll now turn the floor over to Flavia, who's going to talk about our ESG topics. On slide 23, we show how the company has been improving its ESG ratings. We got B in CDP Climate, BBBB in MSCI, and we are B3 under ISE. On slide 24, we see the commitments we assumed in three fronts. By the end of 2023, we have invested in transition, in energy transition and new technologies. These have given us a return above the sector average, and we have been able to reduce the intensity of our gas emissions.
We have created a decarbonization group to decarbonize our assets and also to create value in the short to long term, to capture and store carbon. On slide 25, on the social front, based on the diagnosis in the municipalities where we operate, we have established clear KPIs, which will enable us to follow up on the impacts of our actions. We are now advancing to conserve the Amazon, and we have engaged Belterra to develop agricultural and forestry system. We are also monitoring the legal reserve areas via satellite, and we have now support in place for five conservation units. Now I turn the floor over to Lino, who's going to give you an update on our strategy.
Thank you, Flavia. Moving on to slide 26, I would like to talk a little bit about the design of our strategic plan.
In the last two years, Eneva has expanded its portfolio significantly, has ventured in new business lines, and has achieved many of the objectives for 2025. With new operational assets in our portfolio and new projects under construction, such as Azulão 950 and the liquefaction plants in Maranhão, we decided to update our priorities to respond to the challenges relating to the implementation and diversification of our business. To focus our attention on the execution and creation of new opportunities to generate value, we have updated our main strategic pillars and defined specific initiatives. The first one is to consolidate the expansion in the Amazonas and to execute the Azulão 950 project.
It is a challenge to implement a project this big in the state of Amazonas, and for that, we designed some very specific initiatives to complete the implementation of these thermal power plants with success and to develop the hydrocarbon reserves in the region. The second pillar is to increase reserves in Parnaíba and extend the life cycle of our assets. We will continue with our exploratory campaign, with the assessment of discoveries, and we will work to monetize new cycles in the options for capacity reserve or in new value chains to increase the options to generate value for the company. 2024, we'll see the beginning of a contract in the regulated environment for Parnaíba V, which will increase our fixed revenue by BRL 370 million per year.
At the end of 2024, the Parnaíba VI contract will add another 120 million per year to our fixed revenues. The third pillar focuses on the diversification of the company's business and it focuses on developing the potential of the Sergipe Hub. With this, we will focus on selling flexible gas contracts and on developing products to give flexibility to sellers, buyers, and operators in the market. Additionally, we are going to complete the development and the expansion projects of the Sergipe Hub. The fourth pillar focuses on the SS LNG and on gas solutions for clients which are not connected to the transportation grid, with initiatives to assure new contracts for the sale of LNG, the increase of the capacity for gas liquefaction in Parnaíba, and the use of LNG for road transport.
We aim at developing business models to replace polluting fuels with attractive margins and assured volumes. The first pillar- the fifth pillar of our strategy will focus on capturing new opportunities and new energies with the support of the trading arm, and to develop low carbon technologies. Our objective is to increase the trading of energy in high voltage, in the high voltage market, and to consolidate our gas desk. In terms of low carbon, we will increase our knowledge and develop new opportunities in the area with the competencies we acquired in the last few years.
And lastly, as a fundamental pillar to execute on our strategic plan, we will pursue optimization of our capital structure and the construction of an agile organization able to face the challenges, to develop alternatives and opportunities, to increase the company's resilience, and we also want to prepare leaders who are able to propose and implement pioneer energy solutions. And again, I would like to remember to remember and to remind you of the vision and mission of Eneva, which have been reviewed. Our vision is to generate value, to become one of the fifth largest companies in Brazil in the energy field, and our mission is to offer the best energy solutions for a responsible and safe energy transition. I now turn the floor over to Felippe Valverde.
Thank you, Lino. Good morning to all. We are now going to begin our Q&A session.
Questions should be submitted on the Q&A section in the Zoom platform. The first question is from Guilherme Lima, from Santander. We see a change in the hydrology with the system operator having become more conservative. Eneva's thermal power plants have dispatched in Q1 2024. Could you give us an outlook for the dispatch in the remainder of 2024, and of dispatch with merit and without merit for Eneva's thermal power plants? Thank you for your questions. The hydrology has changed, it is a fact. There were three months in which the greater of affluence comes into the system, that is December, January, and February, and this was below 60%, which is critical. 60% of the historic average.
So when we expected rain, there was no rain, and consequently, we were before in a comfortable situation in 2022 and 2023, but that's not what we see in 2024. Add to that, problems with power, which happened at the end of 2023, despite the high levels of the reservoir. So I think the concern of the ONS is not is well-grounded. It, it's not that they're being conservative. In 2024, the situation is going to be completely different. We will see prices in the short term, which will be very different from what we saw in 2023, and there is going to be a demand for thermal dispatch, which will have... And we will have to dispatch our thermals just like all the operators.
After the greater period of generation in the North region, when there is no more water in Santo Antônio, Jirau, and Tucuruí, and we should see that in June, there is going to be pressure for thermal dispatch, either to maintain a safe level in the reservoir or to meet the demand for power in September or October. So I think we are going to see more dispatch this year. Whether it's going to be in the merit, that is, the dispatch is going to be according to price, sorry, or it's going to be because of electrical reasons, that's more difficult for us to predict. It's going to depend on the affluence, especially in the Southeast, in the next few months.
...If the affluence is below the average, the dispatch is going to happen according to the merit, and prices should go up. If not, we can still see a reasonable volume of dispatch to meet, security and power requirements in the system. Thank you. The second question, also from Guilherme Lima: In relation to the monetization strategy of the idle capacity of FSRU in CELSE and the natural gas desk, could you comment the contracts that you have for the supply of 1.1 million cubic meters per day? What we can say is that we have agreements, one with an industrial client for the second semester, and we also have an agreement with a thermal power plant for, starting in 2026. This thermal has a commitment, undertaken in an energy auction.
There are some conditional factors that have to be sorted out before we can give you some more information about it. But the contract with this, thermal power plant is a long-term contract, which, which matches these sales according to the auction. The industrial client has a shorter term contract. This is what I can say. Thank you.
Well, the third question asks about the capacity auction. Do you have any idea about the size of products offered, and which will be the division of projects? Thank you for your question, Daniel. This is the question we ask ourselves every all the time. First, regarding the demand, obviously, we there are several visions regarding the demand that is going to be necessary.
We believe demand, the demand tends to be high, based on the growth or considering the growth of the system load, and also taking into account the higher and higher penetration of intermittent sources, which requires that you offer dispatchable energy. But obviously, there are uncertainties, there are several parameters, several premises that make this demand issue sensitive. And the second part of your question is about the product mix, the product division. We have product 27, which is product for seven years. There's the 28-15 product, that is the hydroelectric power product. And we believe if it's considered based on the safety premise, reasonable safety, we cannot, this cannot offer a high power, very high power. And so taking it all into consideration, we are very excited.
We believe there will be good demand to be met by thermal power sources, which will create a very good opportunities, not only for us to recontract our Parnaíba one and three projects, and also to make possible the expansion of the Sergipe Hub. These are our main two objectives with this auction. Thank you very much. Another question from Daniel Sá: Which are the levels of SG&A current after the reclassification of these expenses, not considering the expenses you've had with consultancy services last year? Thank you, Daniel. Well, we can work for 2024 a level of SG&A that are similar to that in 2023, based on inflation adjustments. In 2023, we worked very hard. I didn't mention, but we reviewed processes and structures. We discussed some functions that we used to outsource.
This brought significant savings. From now on, there's little to do in 2024, the same, the same level, is that we found in 2023 is pretty feasible. We can rely on that. Now, let's move on to question number 5. Can you talk about, can you talk about an update of the Futura sale process and the Eletrobras thermal power plants M&A process? I can say that they are under due diligence processes, both of them, in the Eletrobras, thermal power plants, in the Futura, also under diligence in the plant. In the next few weeks, we will work on bidding, proposals. That's what I can say. Question 6, also about the auction: Can you give us more, details about the competitive, environment for capacity reserve auctions for this thermal product?
Thank you for your question. Yes, we can talk a little bit about that. We know that there are several thermal power plants projects that are out there. They have agreements starting on now, and because these projects are already ready. They have more competitiveness if compared to other more initial projects. But regarding gas supply, in one of the requirements, which is a 100% flexible requirement. So in spite of looking at the system planning deck, with a high volume of existing thermal power plants with several operators, such as Petrobras and other private operators, we do not believe that 100% of these thermal power plants will be able to participate competitively in this auction. Just like in 2021, a considerable volume of them couldn't take part in that.
But having said that, we believe, we do believe there will be a level of thermal power plants available, and they will be competing for this demand. However, we see some space for expansion in the in-field projects. Just to complement about the competition in the auction, we rely very much in our projects, in our assets. We are the only company that has its own gas infrastructure. And for the Sergipe Hub, we have a amortized structure based on that project. Very competitive projects then, and we are pretty confident that we'll have a good result in this auction. Thank you, Marcel. And with this, we have received some other questions about the same topics we have just dealt with now. So we have no further questions.
We then end this call, this presentation, and we'll see you next quarter to discuss the results of Q1. Thank you!