What Energía del Pacífico’s LNG-to-Power project means for El Salvador

Alejandro Alle's picture
Alejandro Alle, Executive Director, Energía del Pacifico
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With opportunities in El Salvador and Central America so extensive, the future is full of natural gas possibilities throughout the region. Bringing diversification to the current energy mix as well as an increased availability of energy, Energía del Pacífico’s LNG-to-Power project is continuing to further the ever-evolving industry.

Following Gastech 2108 in Barcelona, Gastech Insights spoke with Alejandro Alle, Executive Director at Energía del Pacifico to hear more about the project and exactly what the key benefits it will bring regionally and globally.

Gastech Insights: At Gastech 2018 you presented Energía del Pacífico’s project to be constructed in El Salvador. In an attempt to introduce our readers to the endeavour, what does this project mean for the global gas and energy industry and for El Salvador?

Alejandro Alle: Energía del Pacífico, Ltda. de C.V. (EDP) is the company that owns the “LNG-to-Power” project that will generate electricity from natural gas in El Salvador, Central America. The project’s power plant will be built in the Acajutla Port and will comply with the contracts signed by Energía del Pacífico and all the country’s electrical distribution companies, which specify a total power supply of 355 MW and its associated energy.

The mentioned contracts were signed as a consequence to the public international tender summoned by the Salvadoran state, as an attempt to diversify the country's energy matrix. 

The project is currently at the end of its development phase. However, in early 2019, the construction stage will come into effect and the operation phase will begin in 2021.

Energía del Pacífico’s project, with its approximated total cost of US$800 million, is the largest investment in the history of El Salvador. This accomplishment, combined with the fact that the project will supply about 30% of El Salvador’s electric energy demand, represents the huge importance that Energía del Pacífico will have in both the country and the region.

Gastech Insights: What are the “LNG-to-Power” components for this project?

Alejandro Alle: The principal components are the following three sub-projects:

  • A floating storage and regasification unit with a storage capacity of 140,000 m3
  • A 2 km long subsea pipeline that will connect the floating storage with the power plant
  • A power plant with a total capacity of 378 MW (necessary to comply with the 355 MW power supply contract)
  • A 44 km long high-voltage transmission line between Acajutla and the substation owned by the government-owned transmission company.

Gastech Insights: In your presentation, you spoke about the many entities involved in this project. Can you mention the main ones and their respective roles in EDP’s project?

Alejandro Alle: The major entities involved can be classified into four categories:

  1. The equity holders
  2. The lenders
  3. The LNG supplier
  4. The main contractors

The equity holders are the Chicago-based corporation Invenergy, who has an incredible experience in the development of mega projects such as Energía del Pacífico’s, and the Salvadoran company Quantum Energy, the original developer.

The lenders are three multilateral entities: The International Finance Corporation (the World Bank’s private branch), the US government agency OPIC (Overseas Private Investment Corporation), and the European duo comprised by Finnvera and KfW. Finnvera is the Finnish government agency in charge of export advocacy, and KfW is a development bank based in Germany.

The LNG supplier is Shell, with a long-term supply contract signed in 2017.

The main contractors who will build the diverse components encompassed in the project are:

  • A prestigious Norwegian company will provide the FSRU unit
  • A recognised Dutch company will construct the subsea pipeline
  • The renowned Finnish company Wärtsilä will build the power plant
  • An experienced Spanish company will be in charge of the construction of the transmission line.
  • Finally, a worldwide known company will provide the tugboats.

Gastech Insights: What are some of the benefits that the EDP project will contribute to the gas/energy industry and to El Salvador?

Alejandro Alle: Remarkable benefits are the diversification of the energy matrix with the introduction of natural gas, a reduction of the environmental impact of thermal power, an increase of energy availability, and the promotion of the use of natural gas in the region.

In terms of social impact, we will not only create more than 1,000 jobs during the construction phase and more than 80 technical and administrative jobs during the operational stage but are already executing substantial social investments, in excess of US$500 thousand per year during 20 years, in the Municipality of Acajutla. 

Those yearly contributions began in 2016 and its impact is now evident: the paving of many Acajutla roads, the full reconditioning of a public primary school, and many other works we are proud to contribute with the local community.

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