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Asia And Latin America With Most LNG-To-Power Projects


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    THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

    Asia And Latin America With Most LNG-To-Power Projects

    • 01 Dec 2021
    • Global
    • Oil & Gas

    Key View

    • We maintain our view that natural gas generation will grow globally over the next decade, which supports our positive outlook for LNG-to-power projects.
    • Seeing a strong push towards the expansion of natural gas power generation, Asia is also set to see a number of LNG-to-power projects. We also highlight a strong project pipeline in Latin America.
    • We have identified a number of drivers behind the growing interest in LNG-to-power projects, including price flexibility, gas supply diversification and decarbonisation efforts.

    We maintain our view that natural gas generation will grow globally over the next decade, which supports our positive outlook for LNG-to-power projects. Globally, the share of natural gas in total generation is expected to grow from 23.9% in 2020 to 24.2% in 2030. The most robust growth in natural gas generation is expected in Asia, however, all regions will see a positive rate of growth. We expect that the decarbonisation of the power mix across countries, coupled with technology-driven efficiencies of natural gas power plants, will remain key drivers supporting the upward trend for natural gas. Along with more traditional pipeline gas projects, LNG-to-power projects - which usually include an import LNG facility, either an onshore terminal or a floating unit that feeds an on-site power plan - have been growing over recent years. Although the LNG-to-power market remains nascent, it shows a lot of potential worldwide, as countries pursue a transition towards more clean energy while looking for an alternative to pipeline gas.

    Asia To See The Largest Boost In Natural Gas Generation
    Global - Natural Gas Generation Forecast (TWh)

    f = Fitch Solutions forecast. Source: National sources, EIA, Fitch Solutions

    Seeing a strong push towards the expansion of natural gas power generation, Asia is also set to see a number of LNG-to-power projects. We also highlight a strong project pipeline in Latin America. We expect to see an influx of LNG regasification projects, especially in South East Asia as countries like the Philippines, Vietnam, Indonesia or Myanmar pursue a large-scale decarbonisation strategy, some switching from oil to natural gas power generation, and aim at tapping the global LNG market.

    Over 2020, a number of project developers announced new LNG-to-power projects across Latin America. New Fortress Energy currently develops various LNG-to-power projects across the region with two terminals - in Nicaragua and Mexico - expected to come online over Q221. The company also focuses on the expansion of LNG import terminals and on-site power plants in Brazil, to benefit from regional gas price discrepancies as in the case of the Barcarena terminal which is somehow isolated from the key natural gas pipelines or from the expected robust demand in boosting port of Suape. We also highlight projects currently under consideration in Colombia. Facing limited domestic gas supply, the country plans to tap LNG as it expands new industrial centres on its coast. We have updated the list of our key projects this quarter, adding seven new projects and providing more details and the latest news for a number of projects (see a table below).

    Selected LNG-To-Power Projects
    Country Power

    Plant Name
    Power Plant Generation Capacity (MW) Location Stakeholder Type Name Of Vessel Status Start Date
    Panama Costa
    381 Costa

    Norte

    (Colon)
    AES

    Panama, Inversiones Bahia
    LNG

    jetty
    N/A Operating 2018
    Jamaica Old Harbour

    Bay Power

    Plant
    190 Old

    Harbour

    Bay
    Golar

    Energy
    floating Golar Freeze Operating 2019
    Gibraltar North Mole

    Power Plant
    86 Gibraltar MAN onshore N/A Operating 2019
    Brazil Porto de

    Sergipe

    I Power

    Project
    1,500 Barra dos Coqueiros CELSE floating Golar Nanook Operating 2020
    Jamaica Jamalco

    Power Plant
    94 Clarendon New

    Fortress
    TBC TBC Operating 2020
    Panama Sinolam

    Smarter

    Energy LNG Power
    411 Colon Sinolam Smarter Energy onshore Sinolan LNG Pending

    approvals
    2022
    Indonesia (Bali) Amurang

    County

    Power Plant
    125 Amurang County PT PLN, Karpowership Powership Zeytan Sultan Operating 2020
    Myanmar Thaketa

    plant and

    Thanlying

    plant
    400 (Thaketa), 35MW (Thanlying) Yungon CNTIC VPower onshore Yangon LNG - 2020
    Puerto Rico San Juan

    Power station
    440 San Juan New Fortress Energy onshore TBC Operating 2020
    Mexico TBC 135 Pichilingue floating La Paz,

    Mexico

    Terminal
    2020
    El Salvador Acajutla LNG Power Plant 378 Port of

    Acajutla
    EDP, Grupo Calleja floating BW Offshore

    vessel (most probably)
    Under

    Construction, Financing for

    the projects

    secured as

    of Jan 2020
    2021
    Benin Maria Gleta

    Power Plant
    now: 127, potentially expanded up to 400 Cotonou MAN floating TBC signed GSA with Total, awaits governmental and environmental permits 2021
    Brazil Gas Natural

    Acu I
    1,300 Açu Prumo, BP, Simens floating BW Magna/

    Courage
    Under

    Construction
    2021
    Mozambique Powership in Nacala 120 Nacala MOL, Karpowership Powership (Converted

    former LNG

    carrier

    Dwipura to

    FSRU.

    Powership

    will be

    converted to

    run on LNG

    as opposed

    to heavy fuel)
    TBC Under

    construction
    2021
    Vietnam Hiep Phuoc thermal power 520 Ba Ria-Vung Tau Province onshore Thi Vai

    terminal
    Construction completed as of June 2020 2021
    Nicaragua TBC 300 Puerto Sandino New Fortress Energy (NFE) floating Nicaragua

    Terminal
    Under

    construction
    2021
    Ghana Tema Ghana National Petroleum Corp. (GNPC) and Quantum Power floating tema LNG

    Terminal
    Under

    construction
    2021
    Chile El Campesino 600 Penco EDF, AME floating Hoegh LNG

    vessel
    Delayed 2022
    Vietnam Nnoh Trach 1,500 Ho Chi Minh City PetroVietnam onshore Tibai LNG Under

    construction
    2022
    Colombia Electric

    Complex in

    Sucre Plant I
    1,231 Sucre Generación e Interconexión Eléctrica del Pacífico (GIEP) floating TBC Pending

    approvals.
    2022
    Colombia Electric

    Complex in

    Sucre Plant II
    1,231 Sucre Generación e Interconexión Eléctrica del Pacífico (GIEP) floating TBC Pending

    approvals.
    2022
    Brazil TBC 288 Suape New Fortress Energy floating Suape LNG In the

    development

    phase
    2022
    Brazil TBC 605 Barcarena New Fortress Energy floating Barcarena

    LNG
    In the

    development

    phase.
    2022
    Brazil Gas Natural

    Acu II
    1,700 Açu Prumo, BP, Simens floating BW Magna/

    Courage
    Under

    Construction
    2023
    Vietnam Bac Lieu

    combined

    cycle power

    plant
    3,200 Bac Lieu Delta Offshore Energy floating NA Pending

    approvals
    2023
    Brazil Novo Tempo 605 Barcarena Prumo floating Golar LNG

    vessel
    Under

    Construction
    2025
    Vietnam TBD TBD Haiphong ExxonMobil, JERA likely onshore TBD Pending

    approvals..
    2026
    Bangladesh ACWA Power 3,600 Maheshkhali (to be confirmed) ACWA Power existing

    floating and planned onshore terminal
    Excelerate’s FSRU Summit LNG ( pre-FID TBC
    Sri Lanka Kerawalapitiya

    LNG Power Plant
    300 Kerawalapitiya TBC (tender announced in September 2020) TBC TBC Proposed TBC
    Philippines TBD TBD Batangas province First Gen Corp onshore TBC Aprovals

    and financial closure stage
    TBC
    Philippines Pagbilao Power Project 650 Pagbilao Island, in the Quezon Province Energy World onshore - Aprovals

    and financial closure stage
    TBC
    Philippines TBC TBC Bay of Batangas Excelerate floating Luzon LNG Aprovals

    and financial closure stage
    TBC
    Source: Press releases, The International Group Of Liquefied Natural Gas Importers, OIES, Fitch Solutions

    We have identified a number of drivers behind the growing interest in LNG-to-power projects, including price flexibility, gas supply diversification and decarbonisation efforts. The expansion of the LNG market over the last couple of years has been the key factor in the development of LNG-to-power concepts globally. While at the local level we see that limited domestic supply of natural gas, insufficient access to natural gas import pipelines and/or natural gas supply diversification are the key factors working in favour of LNG-to-power projects. Countries reliant on oil in their power mixes are also keen on implementing LNG-to-power solutions to decarbonise their economies. For some of the countries that lack pipeline infrastructure, an LNG import terminal can be (depending on their geography and regional dynamics) a more feasible solution, allowing them to access the global natural gas market. As an example, Malta invested in an LNG-to-power project in Delimara, which has been operational since 2018, as the country awaits the commencement of operations of a planned pipeline connection, scheduled for 2025. Brazil has also announced a plan to expand its LNG import capacity as it wants to lower its reliance on pipeline gas imports from Bolivia. LNG-to-power projects have also become an alternative for economies that rely on petroleum fuels in their power mix. That was the case with the project in Gibraltar, where the only power plant was converted from marine diesel to natural gas. This factor is also prevalent in the Caribbean where a number of smaller economies rely on heavy fuel oil or diesel to generate power. In our view, investment in LNG-to-power facilities as a means to decarbonise the power sector will also gain additional momentum, with the advancement of technologies in liquefaction and power generation facilities that would reduce the emissions footprint of the LNG industry.

    This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.

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