Brazil’s Chamber of Deputies, the federal legislative body and lower house of the National Congress, on Wednesday passed a highly anticipated natural gas law aimed at opening up the country’s pipelines to market players to increase competition in the sector.

The bill, which has been held up for months, now goes to President Jair Bolsonaro to be signed.

Analysts at the International Energy Agency (IEA), which offered technical advice to the Brazilian government on the gas reform, said the change “is expected to enhance the physical flexibility of the gas system, enable gas to be delivered more quickly, and facilitate the integration of a higher share of intermittent renewables into the Brazilian energy system.

“In the longer term, an open, competitive gas market can...