Gaslog signs FSU charter for Panama power project

LNG shipping company Gaslog has struck a 10-year deal to lease a tanker for an LNG-to-power project in Panama developed by Chinese firm Sinolam LNG and supplied by Shell.

Gaslog will convert the 155,000m³ Gaslog Singapore, currently used as a conventional LNG carrier on the spot market, into a floating storage unit (FSU) that will receive and store LNG off the coast of Colon at the Atlantic mouth of the Panama Canal, the company said.

The LNG will be piped to a planned onshore regasification facility and the gas used as feedstock for a 400MW power plant being developed by Sinolam LNG, a subsidiary of Chinese private-sector group Shanghai Gorgeous Investment Development.

The power plant had originally been contracted to supply local utilities from November 2020, but it may not be commissioned before January 2022, Panama's energy department said in April.

Shell signed a 15-year contract in September last year to supply 400,000 t/yr of LNG to the power plant. The company has long-term supply agreements with Cheniere, which operates the Sabine Pass and Corpus Christi export facilities in Louisiana and Texas.

Sinolam LNG's project is one of three that Panama says will form an LNG distribution hub in Central America. Panama began importing LNG in summer last year when it received a commissioning cargo for its Costa Norte LNG-fired power complex, which features a 381MW power plant and 1.5mn t/yr regasification terminal. The project is expected to be inaugurated this month after the start of commercial operations at a 180,000m³ onshore LNG storage tank in August.

Local firm Panama NG Power had been scheduled to commission a 670MW power plant in July 2020, but it may not begin operations before late 2023. The company does not yet have permission to build the power plant because of a lack of financial clarity surrounding the development.