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29 September 2016

Mott MacDonald is independent engineer for CCGT plant and interconnected LNG terminal, Panama

Mott MacDonald is acting as lenders’ independent engineer for the new AES Colón combined-cycle gas turbine (CCGT) plant and liquefied natural gas (LNG) terminal in Panama. The 380MW project, being developed by AES Corporation and the Motta Group through its subsidiaries Gas Natural Atlántico S. de R.L. and Costa Norte LNG Terminal, comprises a dual fuel CCGT plant, adjacent LNG import and export terminal and 180,000 m³ storage facility.

AES Colón is being built by Korean-based contractor POSCO on a 20-hectare site near the Atlantic entrance of the Panama Canal in the city of Colón. Once complete, the power station will be the first of its kind in the country and connect to the national grid via a transmission line, with a capacity to supply up to 3,000GWh per year. 350MW of capacity and associated energy will be sold to three distribution companies under 10-year power purchase agreements awarded through a competitive bidding process led by Empresa de Transmisión Eléctrica Panameña (ETESA), the state-owned transmission company. The remaining capacity and energy will be sold on Panama’s wholesale electricity market.

Mott MacDonald initially performed a comprehensive technical due diligence for the project, which led to its appointment as independent engineer for the construction, commissioning and operational phases. This role will include desktop and on-site reviews of the project’s construction progress, evaluation of applications for drawdown of funds from the loan, assessments of actual versus forecast expenditures and appraisals of engineering, procurement and construction contractor change orders and permitting status. The consultancy will also review punch lists towards the end of the construction period and be on-site to witness the performance tests.

Experts from around the company’s global network have been brought together to support delivery of the project. Mott MacDonald’s UK oil and gas advisory team is leading the project and providing all input relating to the LNG import facility. Its thermal generation specialists are offering input for the power plant elements, with its US ports, coastal and offshore team providing guidance on the maritime aspects. Additionally, the consultancy’s hydropower and renewables team is providing support on reviewing the permitting status.

Albert Allan, managing director of Mott MacDonald's oil and gas business, said: “Panama has historically relied on fuel oil and hydropower to generate electricity. Due to price and weather-related volatility, AES opted for a natural gas solution that is opening the use of gas in the coming years for generation projects, bunkering, industrial and residential use.”

"By providing a reliable supply of LNG, AES Colón should benefit sectors such as electricity generation, transportation and ship bunkering. It will also play a major part in the country's ambition to move away from reliance upon traditional oil-fired plants to generating power from cleaner fuels," Albert added.

Construction of AES Colón is underway, with first power expected to be delivered in 2018.

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