• 15 mins India’s Reliance Boosts Export Refinery Capacity By 30%
  • 2 hours Nigeria Among Worst Performers In Electricity Supply
  • 8 hours ELN Attacks Another Colombian Pipeline As Ceasefire Ceases
  • 13 hours Shell Buys 43.8% Stake In Silicon Ranch Solar
  • 17 hours Saudis To Award Nuclear Power Contracts In December
  • 20 hours Shell Approves Its First North Sea Oil Project In Six Years
  • 21 hours China Unlikely To Maintain Record Oil Product Exports
  • 22 hours Australia Solar Power Additions Hit Record In 2017
  • 23 hours Morocco Prepares $4.6B Gas Project Tender
  • 1 day Iranian Oil Tanker Sinks After Second Explosion
  • 4 days Russia To Discuss Possible Exit From OPEC Deal
  • 4 days Iranian Oil Tanker Drifts Into Japanese Waters As Fires Rage On
  • 4 days Kenya Cuts Share Of Oil Revenues To Local Communities
  • 4 days IEA: $65-70 Oil Could Cause Surge In U.S. Shale Production
  • 4 days Russia’s Lukoil May Sell 20% In Oil Trader Litasco
  • 4 days Falling Chinese Oil Imports Weigh On Prices
  • 4 days Shell Considers Buying Dutch Green Energy Supplier
  • 5 days Wind And Solar Prices Continue To Fall
  • 5 days Residents Flee After Nigeria Gas Company Pipeline Explodes
  • 5 days Venezuela To Pre-Mine Petro For Release In 6-Weeks
  • 5 days Trump Says U.S. “Could Conceivably” Rejoin Paris Climate Accord
  • 5 days Saudis Shortlist New York, London, Hong Kong For Aramco IPO
  • 5 days Rigid EU Rules Makes ICE Move 245 Oil Futures Contracts To U.S.
  • 5 days Norway Reports Record Gas Sales To Europe In 2017
  • 5 days Trump’s Plan Makes 65 Billion BOE Available For Drilling
  • 6 days PetroChina’s Biggest Refinery Doubles Russian Pipeline Oil Intake
  • 6 days NYC Sues Five Oil Majors For Contributing To Climate Change
  • 6 days Saudi Aramco Looks To Secure $6B In Cheap Loans Before IPO
  • 6 days Shell Sells Stake In Iraqi Oil Field To Japan’s Itochu
  • 6 days Iranian Oil Tanker Explodes, Could Continue To Burn For A Month
  • 6 days Florida Gets An Oil Drilling Pass
  • 7 days Oil Prices Rise After API Reports Staggering Crude Oil Draw
  • 7 days Tesla Begins Mass Production Of Solar Shingles
  • 7 days EIA Boosts World Oil Demand Forecast For 2018 By 100,000 Bpd
  • 7 days Businessman Seeks Sale Of $5.2B Stake In Kazakhstan Oil Field
  • 7 days Exxon Accuses California Of Climate Change Hypocrisy
  • 7 days Norway’s Recovering Oil Industry Resumes Hiring
  • 7 days $2.3 Million Seized Following Singapore Oil Heist
  • 7 days China Nears 2016 Carbon Emissions Target
  • 8 days Oil Companies Respond Slow To New U.S. Lease Plan
Alt Text

The Most Remarkable Natural Gas Deal Of 2018

The potential first delivery of…

Alt Text

China Gas Imports Hit All-Time High

Natural gas imports into China…

Alt Text

Romania Poised To Ramp Up Gas Output

Often overlooked, Romania has huge…

Irina Slav

Irina Slav

Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.

More Info

Panama Canal Can’t Handle U.S. LNG Boom

Nat Gas

The International Energy Agency recently predicted that the United States could become the world’s top LNG exporter within ten years. This prediction, however, is far from a certain one. The U.S. LNG boom is fraught with challenges, the latest among them, apparently, the Panama Canal.

LNG producers and the Panama Canal Authority are locked in an argument about whose fault it is that not enough LNG tankers are using the freshly expanded channel that saves 11 days from the journey to Asia, which has become a key market for U.S. LNG. According to the producers, the canal has expanded the access of cargo vessels at the expense of LNG tankers. According to the authority, LNG producers can’t comply with timetables.

The facts are as follows: the expansion of the Panama Canal has been going more slowly than initially planned. To date, only one LNG tanker a day can pass through the Panama Canal. That’s compared with a promised 12 slots for all kinds of vessels every day via the wider channel. Of this planned total, however, right now the Canal has a capacity to service just eight over 24 hours.

But there’s more: recently the head of an LNG producer, Sempra, and the chief executive of the Panama Canal Authority locked horns over the discrepancy between the LNG industry’s plans and the Canal’s capacity. Sempra’s head, Octavio Simoes, fired the first shot, saying that in the future, insufficient channel capacity could cost gas traders a substantial sum and cripple U.S. LNG sales internationally. The Authority’s head, Jorge Quijano, responded with a hint that the LNG industry has yet to prove it deserves more slot reservations than one a day.

If capacity-building were a sure indicator of the industry’s worth in the eyes of the Panama Canal Authority, then this worth would be quite high. Besides the Sabine Pass liquefaction plant—already the second-largest globally after Qatar’s Ras Laffan—there is now what the Houston Chronicle calls a second wave of LNG terminals coming on stream. Related: Kuwaiti Oil Minister: OPEC Cuts May End Earlier Than Planned

Dominion Energy’s Cove Point LNG terminal in Maryland is to soon start commercial production of the gas for Asian customers, with a capacity of 750 million cu ft daily. Over the next two years alone, we should see another four terminals be completed and start liquefying LNG for export. These include Cheniere’s second terminal, in Corpus Christi, Texas, which should start operating in 2019 with a capacity of 1.2 bcf/d; Freeport LNG, which should come on stream in 2018 with a total capacity of 2.1 bcf/d; Kinder Morgan’s Elba Island LNG (300 mcf/d; and Sempra Energy’s Cameron LNG terminal in Louisiana, with a capacity of 1.8 bcf/d.

Energy Information Administration data for January to November reveals that to date, the liquefaction capacity in the Lower 48 states stands at 2.8 billion cu ft daily, with capacity utilization at 80 percent and daily exports averaging 1.9 bcf/d. This will probably continue to grow, but for how long and by how much is difficult to forecast in light of a looming global LNG glut.

A series of large-scale LNG projects in Australia recently began commercial production, and most recently, Russia’s Yamal LNG, the country’s first, started operating. By 2019, the terminal should reach its full capacity of 16.5 million tons of LNG.

LNG is emerging as a crucial export product for every mineral resource-rich country as the fuel increasingly replaces coal and crude oil while the world’s energy needs continue to expand. U.S. LNG producers need to act quickly to overcome the challenges they are facing, if the IEA’s prediction is to come true amid growing and ever more intense competition.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Sergei on December 17 2017 said:
    “… Russia’s Yamal LNG, the country’s first …”

    Yamal LNG is the second LNG project in Russia.

    The first one is Sakhalin-2 LNG, operating since March 2009, with a total capacity of 9.6 MTPA (?1.26 Bcf/d).

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News