Panama Seeks Construction Of $800M Gas, Electricity Project

24th Jun 2010 20:25

CARTAGENA, Colombia (Dow Jones)--The Panamanian government seeks the construction of a plant to process natural gas and a gas-fired power generator, which would need $800 million investment, Energy Minister Juan Manuel Urriola said Thursday. The government wants a private company to build a regasification plant with a capacity to process 120 million cubic feet a day and a gas-fired electricity plant with a capacity of 250 megawatts, Urriola said. The plant would buy liquefied gas from a supplier who would transport it by ships and "regasify" it for sale in Panama. The government already granted a swath of land on the banks of the Panama Canal for the project. Panama wants to encourage the use of natural gas as an energy source to diversify from hydropower, which carries a risk in case of drought, and liquid fuel, which is expensive, he added. Currently, Panama gets 60% of its electricity supply from hydropower plants and the remainder from thermal plants. The company that would carry out the project would be a world-sized company, he said. "The natural gas industry is for Major League players," he said. He mentioned several companies, such as AES Corp. (AES), Gas Natural SA (GAS.MC), Ashmore Group (ASHM.LN), Suez (SZE.FR) and Enel Spa (EN), as companies that might be interested to build the plants or to be customers of the project. The project would also supply gas to any company interested in buying. Urriola said the country may also import gas through a pipeline from Colombia, once certified Colombian natural gas reserves are high enough. -By Inti Landauro, Dow Jones Newswires; 57-310-867 65 42; [email protected] (END) Dow Jones Newswires June 24, 2010 15:25 ET (19:25 GMT)