Nicaragua reshuffles energy team ahead of LNG launch

Nicaraguan president Daniel Ortega has reshuffled his energy authorities in an apparent attempt to deflect the impact of new US targeted sanctions on the eve of the launch of an LNG project by US firm New Fortress Energy.

The US Treasury Department expanded a list of targeted Nicaraguan officials on 15 November in response to the country's 7 November elections widely deemed to be fraudulent.

Among the newly sanctioned officials is energy minister Salvador Mansell whose responsibilities have been reassigned to newly designated deputy energy minister Estela Maria Martinez, according to 19 November government statement.

Ortega also named Martinez as president of electricity regulator INE, replacing sanctioned Antonio Castaneda, and also as president of state-owned transmission company Enetrel.

But other sanctioned officials will remain in Ortega's cabinet, which could complicate dealings with foreign investors. A key figure here is Francisco Gutierrez, manager of state-run power distributors Disnorte and Dissur Rodolfo.

The distribution companies have an agreement to purchase power from New Fortress Energy that has developed a $700mn LNG-to-project on Nicaragua's Pacific coast.

New York-based New Fortress has not responded to repeated requests for comment from Argus.

The 25-year project, whose start date has been delayed several times, features delivery of 420,000 t/yr of LNG, a 138,000m3 offshore LNG receiving and storage vessel and a new 300MW gas-fired power plant.

"We are completing terminal and power plant construction in the fourth quarter of 2021, and we expect to begin commissioning of our power plant in the first quarter of 2022," the company said on 2 November.

Referring to previous sanctions on Nicaraguan officials and entities, the company could face "an array of issues" if any of its local partners becomes subject to sanctions, the company said in its 6 August second quarter 2021 report to the US Securities and Exchange commission.

Sanctions on entities it is working with could include "having to suspend our development or operations on a temporary or permanent basis, being unable to recuperate prior invested time and capital or being subject to lawsuits, investigations or regulatory proceedings," it said.

Nicaragua said on 15 November it was withdrawing from the Organization of American States (OAS) after the Washington-based body criticized the elections.

The elections held "were not free, fair or transparent and do not have any democratic legitimacy," the OAS said.