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Engie and the AES Corporation have agreed to enter into a joint venture to market and sell liquefied natural gas (LNG) to third parties in Central America and to provide bunkering services.

The joint venture will utilize the Costa Norte LNG terminal currently under construction in Colon, Panama, which is owned 50/50 by AES and Inversiones Bahia.

The total capacity of the Costa Norte LNG terminal is approximately 1.5 million tonnes per annum (mtpa), of which 25 percent will be used for the 380-megawatt (MW) AES Colon combined cycle gas turbine (CCGT) plant currently under construction on the same site.

As part of the agreement, Engie will supply up to 0.4 mtpa of LNG to the CCGT beginning in 2018. The remaining terminal capacity is primarily available for the joint venture to market and sell to third parties, including up to 0.7 mtpa of LNG sourced from Engie mainly through the Cameron gas liquefaction project in the United States.

This joint venture follows the joint marketing agreement signed by Engie and AES late last year, whereby both groups agreed to jointly market LNG in the Caribbean from AES's Andres regasification facility in the Dominican Republic. The combined regasification capacity of Andres in the Dominican Republic and Costa Norte in Panama is approximately 3 mtpa.

"This new agreement will pave the way for Engie and AES to supply LNG to industrial customers, develop small scale demand and provide bunkering services," the two joint venture partners said in statement.

"Engie's and AES' objective continues to focus on providing a cleaner and more cost-effective alternative to oil-fueled power generation, while at the same time satisfying a growing need for natural gas in Central America and the Caribbean," the companies added.