AES Hit With $4 Billion Lawsuit Alleging LNG-to-Power Market Monopoly in Panama
Panamanian developers have filed a $4 billion lawsuit alleging AES and its partners coordinated a scheme to monopolize Panama’s LNG-to-power market.
(P&GJ) — Panamanian energy developers Sinolam LNG Terminal and Sinolam Smarter Energy LNG Power Co. have filed a civil lawsuit in Virginia alleging that AES Corporation and its partners orchestrated a years-long scheme to monopolize Panama’s liquefied natural gas–to–power market.
The lawsuit, filed in the Circuit Court for Arlington County, Virginia, names AES and partners including InterEnergy Holdings, alleging coordinated efforts to block competing LNG import, regasification and gas-fired power projects in Panama.
According to the complaint, the defendants used coercive business practices, misuse of confidential information and alleged influence over government regulators to exclude Sinolam from the market and secure control over LNG infrastructure and LNG-fueled power generation in the country.
Sinolam alleges it had secured regulatory approvals, power purchase agreements and long-term customer commitments for an LNG terminal and power plant in Colón, Panama—projects positioned to support Panama’s emergence as a regional LNG hub following the Panama Canal expansion.
The complaint claims that after Sinolam rejected pressure to abandon its terminal project or accept terms that would have made it dependent on AES-controlled infrastructure, AES shifted from negotiations to exclusionary tactics. Sinolam further alleges that senior AES executives directed strategy from the company’s headquarters in Virginia, including actions aimed at delaying permits and undermining regulatory approvals.
The lawsuit also alleges that InterEnergy obtained Sinolam’s confidential business information under a non-disclosure agreement, then used that information to partner with AES on a competing venture that displaced Sinolam and its customers from the market. According to the filing, the loss of those customers rendered Sinolam’s long-term contracts worthless.
Sinolam claims the defendants leveraged political influence to secure regulatory advantages, including expedited approvals for AES-backed projects and the revocation of Sinolam’s licenses. The lawsuit further alleges that Panama’s government is a significant shareholder in AES’s local subsidiary and that those relationships were used to pressure Sinolam across multiple administrations.
As a result, Sinolam alleges AES now controls both major LNG-fired power plants in Panama—one in partnership with InterEnergy—as well as the country’s only operational LNG import terminal, effectively eliminating competition and consolidating control over energy supply in Central America and the Caribbean.
The lawsuit asserts ten claims, including tortious interference with contract, statutory civil conspiracy and common-law conspiracy under Virginia law. Sinolam is seeking compensatory damages exceeding $4 billion, along with other relief.
“This case is about protecting competition and the rule of law,” said Kenneth Zhang, Sinolam’s CEO. “Sinolam invested hundreds of millions of dollars, followed every legal requirement, and played by the rules. What we allege is a coordinated effort by powerful incumbents—backed by their cronies and government partners to shut down a competitor rather than compete on the merits, with the victims including not only Sinolam but the people of Panama and other countries who are now paying higher energy prices, and LNG suppliers in the United States and elsewhere, because AES and its partners, along with the assistance or authorization of the Panamanian government, want to control the market.”