Marianna Parraga, Elida Moreno

HOUSTON/PANAMA CITY – The Panamanian government is expected to get soon a proposal for First Quantum Minerals (OTC) to turn a coal-fired powerplant into cleaner energy. This was stated by Energy Minister Jorge Rivera to Reuters on Wednesday.

Last month, a unit of the Canadian miner agreed to pay Panama higher royalties as part of contract negotiations for its flagship project. The company must stop using coal at Panama’s sole remaining plant that burns it for power generation.

Rivera stated that the plant conversion is a significant milestone in an overall clean energy plan. He said Rivera was on track to eliminate coal and bunker from power generation by 2023.

Panama’s Congress is yet to approve the contract with First Quantum, and both sides must sign it. The contract stipulates that the miner has to start technical studies within six months of signing it. According to the energy ministry, this goal is to develop cleaner energy technologies that can replace coal-burning power plants.

John Kerry, the U.S. special envoy to climate change will be attending the fifth ministerial meeting of the Energy and Climate Partnership of the Americas. This week’s event will take place in Panama and will center on the shift towards cleaner fuels.

Rivera explained, “Our view is that energy transition needs to be inclusive and fair. Not just technological.”

The global reshuffle in energy supplies has resulted in a reduction of demand for LNG vessels transiting through Panama Canal. Ships are now making U-turns from Asia to Europe, according to authorities at the Panama Canal.

However, the Canal has to deal with a higher seasonally-demanded transit. It handles the passage of approximately 39 ships each day.

KICKING OFF

A Panama-based 670 megawatt natural gas-fueled power plant, which is $1 billion in size, will be built near Colon. This project was part of Panama’s clean-energy agenda. Construction began last month.

“The plant will be operational between December 2023 to April 2024.” Rivera stated that we have prepared the decommissioning other plants for the end 2023.

Panama’s 82% renewable electricity production last year is being upgraded by the government and its running price predictions. This will encourage the use of cleaner energy sources like sugarcane-based bioethanol production and installation of centralized power generation units.

Minister said that the government will also call consultants companies to get their advice about Panama’s Hydrocarbon Law reform, which is aimed at modernizing regulations for downstream projects.