The Ministry of Energy and Mines (MEM) is analyzing which ports (and what type of infrastructure) could receive liquefied natural gas (LNG) ahead of the fifth tender for the Electricity Generation Expansion Plan (PEG-5).

PEG-5 seeks to contract up to 1,400 megawatts of guaranteed power and up to 150 megawatts of installed power to meet the demand of distributors Empresa Eléctrica de Guatemala, S.A. (Eegsa) and Energuate (Deocsa and Deorsa).

According to Juan Fernando Castro, Deputy Minister of Energy and Mines, there is “an interesting area” in Puerto Quetzal, but it would be necessary to build a 4-5 kilometer underwater gas pipeline to transport the gas from the sea to land.

Castro explains that, in any port on the Atlantic or Pacific coast, the system would consist of a tanker—a floating storage and regasification unit—that transports LNG, converts it into gas, and sends it through a pipeline to land, from where it would be transported to power plants for use as fuel. He adds that, in the case of Santo Tomás, the million BTUs would be cheaper because it would not be necessary to go around the Panama Canal.

Liquefied natural gas is obtained by cooling natural gas to around –160 °C, which reduces its volume by 600 times, according to the Association of Renewable Energy Generators (Ager). It is transported by ship, then regasified and used to generate electricity.

Sea or land: The two alternatives

Vice Admiral José Antonio Lemus, president of Empresa Portuaria Quetzal (EPQ), indicates that one option for the LNG infrastructure would be similar to that of propane gas in Puerto Quetzal, where a pipeline runs along the bottom of the dock and reaches the tanks located in the port area.

Lemus also mentions that another alternative is to locate the ship offshore, moored to buoys connected to a pipeline for unloading into onshore storage tanks. Although he considers the construction of LNG infrastructure to be feasible, he believes that, due to limited internal capacity, the offshore option would be the most convenient. He points out that this pipeline requires authorization from the Ministry of Defense, as it involves laying pipes in territorial waters and exceeds the jurisdiction of Puerto Quetzal.

Raúl Bouscayrol, a member of the Large Users Association, believes that LNG could be imported from the United States. “We are going to create a dependency that will fluctuate according to global gas prices. This involves a certain level of risk, as the country would no longer be self-sufficient in energy production and would depend on an imported resource,” he says.

Luis Ortiz Peláez, president of the National Electric Energy Commission (CNEE), says that there is now the possibility of natural gas entering the country directly for base load generation—which supports all demand 24 hours a day, 365 days a year. Ortiz highlights that “some hydroelectric technologies that may have reservoirs would be added, but also other types of renewable technologies, especially solar energy.”

Investment in new infrastructure

For a power plant such as those expected with PEG-5, Carlos Colom, former president of the CNEE, estimates that the gas infrastructure component—for storage, regasification, and certain transportation elements—would require an investment of approximately US$250 million to US$300 million. “It would be unrealistic to think that these investments would be made by the port authority or the state. I think the most sensible thing would be to facilitate the private sector to make them, in compliance with the rules. If fees have to be paid, let them be paid, and let it be a win-win equation,” he adds.

“A transmission line is needed to carry electricity from the ports to the consumption centers. It is important that the system has that capacity. Infrastructure is needed in ports and for transmission, and if gas is to be transported by road—because the power plant had to be located far from the port and there are no gas pipelines—that, in my opinion, will be very difficult due to right-of-way issues,” explains Colom.

When construction work begins on the infrastructure needed by the private sector for LNG, according to Rudolf Jacobs, director of the CIG board of directors, it will require “permits, paperwork, and support from the state.” Colom adds that coordination will be necessary with the Tax Administration Superintendency (SAT), the Ministry of Environment and Natural Resources (MARN), the MEM, and the CNEE.

CIG: Commitment must be made “with caution”

Bouscayrol indicates that it is a good technology at affordable prices. “It is important that we have this transitional energy source, which could be natural gas, and I believe that of all fossil fuels, it is the least polluting and the cleanest,” he adds.

The focus of this tender is natural gas; in Bouscayrol's opinion, it should be approached with caution so as not to make too large an investment. “Let's say, generation of more than 500, 600, or 700 megawatts would feel a bit daring and risky, because we are making a very specific bet on a single technology that, as a country, we have not developed.” He points out that Guatemala produces little natural gas, so it would have to import it.

Colom, considers that promoting the arrival of natural gas is a “very smart” move. “The challenge is to ensure that the rules of the game encourage interest in submitting bids, as it is not easy to attract investment in something like natural gas in a country like Guatemala.”

Another challenge Buscayrol sees is how to include LNG in port activity. "In Guatemala, we have a port crisis: ships are stuck and can't dock or unload. LNG will be connected to a port and will have to be unloaded or have a gas pipeline entering the port. There are solutions. One could be a floating plant, like the one in El Salvador," Jacobs suggests.

Regardless of which port imports LNG, “each one has its own challenges and important issues to resolve. If we have not yet resolved the issue of container and bulk product entry, it is likely that a gas importer will put greater pressure on our port system,” concludes Bouscayrol.

Prensa Libre attempted to obtain the version of the Santo Tomás de Castilla Port Company—given that the Caribbean route is recommended due to natural gas logistics costs—but no response was received to requests for an interview.

“Abundant” energy

The MEM states that this tender seeks to ensure energy security, quality, sufficiency, and reasonable prices. “There are 1,400 megawatts at stake, half of which are expected to be backed by natural gas. This responds to a process of reducing greenhouse gas emissions caused by bunker fuel, diesel, or coal,” says Castro.

All renewable resources and non-renewable technologies whose sources have low CO₂ emissions, such as natural gas, are eligible to participate in this tender. Ricardo Chacón, vice president of the Association of Renewable Energy Generators (Ager), believes that natural gas is the fuel that will enable an energy transition to promote the development of more renewable energy. “The complementary block can be mixed with existing plants, adding renewable energy to supply the demand of the distributors' complementary block.”

With PEG-5, the CNEE expects the country to have abundant energy, sufficient to keep pace with growing demand. “In Guatemala, when new generation capacity is added, prices tend to fall due to technologies and other energy sources,” says Ortiz. “It's a big bet and totally necessary to achieve development and economic growth,” says Bouscayrol, from the Association of Large Users. Supply will begin on May 1, 2030, 2031, 2032, and 2033. Contracts may be for 15 years for new plants or plants in operation with additional investments, and for up to five years for plants in operation that do not make additional investments.

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