Landbridge Group, a Chinese logistics and energy group, has agreed to develop and operate a new port on Panama's Margarita Island.
Located by the Atlantic entrance to the Panama Canal, Margarita Island is part of the Colon Free Trade Zone. Its port will stand opposite to Port of Cristobal, which is owned by Hong Kong’s CK Hutchison.
Landbridge has plans to develop the site as a modern deep-water port with four container berths, allowing it to handle 3 million TEUs annually. Construction of the facility, which will be carried out by China Communications Construction Company, is expected to be complete within three years.
Landbridge declined to provide financial details on the acquisition, but a local press report said the investment was estimated at $900 million.
The firm argues the expansion will facilitate the trade of bulk commodities between South American and Asian countries and bolster transport between China and the Eastern United States.
Landbridge says it plans to connect Margarita Island Port with Australia’s Port of Darwin, which the company is now running after winning a 99-year lease last November, as well as with another port it owns in Shandong, where it is headquartered.
Landbridge, which manages about $7.8 billion, is owned by Chinese billionaire Ye Cheng. In addition to infrastructure, the group also has interest in oil and gas business, having invested in an Australian natural gas exploration company Westside Corporation in 2014.