ENGIE and The AES Corp. (NYSE: AES) have formed a joint venture to market and sell LNG in Central America.

The JV will utilize the Costa Norte LNG terminal currently under construction in Colón, Panama, which is owned 50:50 by AES and Inversiones Bahía. The total capacity of the Costa Norte LNG terminal is approximately 1.5 million tonnes per annum (mtpa), of which 25% will be used for the 380 MW AES Colón CCGT currently under construction on the same site.

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 further strengthens 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’ Andres regasification facility in the Dominican Republic. The combined regasification capacity of Andres in the Dominican Republic and Costa Norte in Panamá is approximately 3 mtpa.

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. 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.