The Republic of Panama keeps strengthening its energy portfolio, this time Panama is conducting a feasibility study with the company Energy Transfer, to build two liquified petroleum gas terminals, one in the Atlantic and one in the pacific, both connected through a pipeline. A few days ago, both parties announced that they have signed a Memorandum of Understanding (MOU) to conduct a study of the feasibility, to see if the pipeline project is viable for both parties. The MOU is a non-binding agreement that was signed a few days ago in Dallas by Energy Transfer Executive Chairman Kelcy Warren and Panama President Laurentino Cortizo, this agreement hopes to expand the international operations of Energy Transfer into new markets, while also providing Panama the opportunity to be a distribution center of different petroleum products to international markets.

Energy Transfer is one of the biggest energy production companies in the United States with a diverse portfolio of energy assets, and over 90,000 miles of pipeline across 38 states as well as Canada, with its international offices being in Canada and China.

Panama has been pushing to increase its energy production, while also moving to cleaner energy sources, through a variety of strategies such as enhancing the power delivery, as well as investing in renewable energy solutions, such as hydraulic energy, wind, and solar energy, and natural gas energy. The announcement to conduct the feasibility studies to build two petroleum gas terminals and the pipeline comes after the announcement of a major billion-dollar natural gas plant project that would increase Panama’s energy production and supply the nation with 670 MW of power, clearly showing that Panama intends to become a hub for clean energy production. Panama is also strengthening its energy production to lower energy cost for its resident but also for the commercial cost of electricity is a major aspect when it comes to attracting foreign investment and staying competitive in the global market.

Energy Transfer, however, has been cited in the past for environmental violations, and in 2020 the company had to pay a historic 30 million dollars fine in the United States to the state of Pennsylvania for its involvement in a 2018 gas explosion and a fire caused by a landslide along the pipeline’s route in Beaver County, that resulted in the destruction of a home, a barn, and several cars, and even prompted an evacuation. The Department of Environmental Protection (DEP) said the company has “demonstrated its intention to correct its unlawful conduct to DEP’s satisfaction.” And that it will be closely monitoring the company, for its part the company stated that it was “pleased to have reached an agreement with the DEP that will allow us to safely complete the construction projects we have underway in Pennsylvania.”

The project signed by both parties includes the construction and operation of a liquified petroleum gas terminal in the pacific and one in the Atlantic, both connected by a pipeline for transport and export of liquified petroleum gas (LPG) to international markets. This all depends on the outcome of the different studies being conducted such as feasibility and an economic study, related to the transportation of liquid gas in Panama, if these studies show positive results, then it is highly likely that this project will move forward, and that it will have a positive impact for both parties, for one it will give Energy Transfer access to new markets while allowing Panama to be a distribution center to different international markets.