The new LNG facility is expected to establish Panama as the natural gas hub for the Central American region


Image: AES commenced operations of the new LNG hub in Panama. Photo: courtesy of Carlo San from FreeImages.

US-based electric power distribution company AES has commenced the operations of the liquefied natural gas (LNG) hub at the AES Colón plant in Panama, Central America.

Located at the AES Colón plant, the LNG storage facility will enable the usage of LNG throughout the region.

The AES Colón plant comprises 180,000m3 LNG tank and a 381MW combined cycle power plant, which began commercial operations in 2018. The power plant had been operating with gas from temporary sources.

The new LNG facility is also expected to establish Panama as the natural gas hub for the Central American region.

AES president and CEO Andrés Gluski said: “The inauguration of the AES Colón storage facility is a significant milestone toward transforming the Central American energy sector, and enabling a safer and more sustainable energy future.

“Since AES introduced natural gas in the Dominican Republic 19 years ago, it saved consumers more than half a billion dollars a year and avoided approximately four million tons of CO2 emissions annually.”

The LNG hub project employed over 2,000 Panamanians

According to the company, construction of the LNG hub was completed in 39 months and more than 2,000 Panamanians were employed for the project.

The new LNG hub is expected to provide a new market for US LNG exports.

The company has reserved 80% of AES Colón’s terminal capacity for industrial and commercial companies in Panama and Central America.

In the future, AES is planning to build a similar project in Vietnam, which is expected to bring many of these same benefits to Southeast Asia.

Recently, the firm has secured approval from the Vietnamese government to develop the 2.2GW Son My 2 plant.

To be located in the south-central province of Binh Thuan, the Son My 2 plant is a combined cycle gas turbine (CCGT) power plant and will have a 20-year contract with the government.

AES expects the Son My 2 plant to achieve financial close in 2021and begin commercial operations in 2024.