Think tank flags 300MW Nicaragua gas-to-power project

New Fortress Energy’s (NFE) plan to build a 300MW natural gas fired power plant in Nicaragua would deepen the country’s excess generation problem.

That is according to local think tank Funides which recommends that the project not enter service until 2026, versus the announced startup date of the second half of 2021.

BNamericas data shows that in June, Nicaragua’s installed capacity totaled 1,619MW and maximum demand reached 635MW.

In February, NFE reported it signed a 25-year power purchase agreement with Nicaraguan distributors Distribuidora de Electricidad del Norte and Distribuidora de Electricidad del Sur to supply electricity from the plant which would be built near Puerto Sandino.

An offshore LNG receiving, storage and regasification terminal would supply gas to the plant. Total estimated investment reaches US$700mn.

Energy reserve levels should fall to 30-40%, Funides said in a sector report, which also looks at transmission and distribution shortfalls.

The project would provide grid stability amid variations of intermittent non-conventional renewable energies, energy and mines minister Salvador Mansell Castrillo said previously.

The gas-fired plant, which would be Nicaragua’s first such undertaking, also would have the potential to displace more expensive liquid fuel generation.

Another caveat is what impact US sanctions on President Daniel Ortega’s regime could have on New York-based NFE’s project.

In its latest 10-Q SEC filing, NFE highlights that “if any of our counterparties becomes subject to sanctions as a result of these laws and regulations, changes thereto or otherwise, we may face an array of issues, including, but not limited to: having to suspend our development or operations on a temporary or permanent basis.” 

This week, BNamericas presented the "LNG in Latin America" webinar to showcase the highlights of our latest Intelligence Series Report on LNG.