• 4 minutes What If Canada Had Wind and Not Oilsands?
  • 8 minutes EU Confirms Trade Retaliation Measures vs. U.S. To Take Effect on June 22
  • 17 minutes Could oil demand collapse rapidly? Yup, sure could.
  • 12 hours Kaplan Says Rising Oil Prices Won't Hurt US Economy
  • 21 hours Tariffs to derail $83.7 Billion Chinese Investment in West Virginia
  • 30 mins Saudi Arabia turns to solar
  • 29 mins Corruption On The Top: Netanyahu's Wife Charged With Misuse of Public Funds for Meals
  • 6 hours Could oil demand collapse rapidly? Yup, sure could.
  • 2 hours Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 3 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 2 hours U.S. Withdraws From U.N. Human Rights Council
  • 6 hours Gazprom Exports to EU Hit Record
  • 11 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 7 hours OPEC Meeting Could End Without Decision - Irony Note Added from OPEC Children's Book
  • 4 hours What If Canada Had Wind and Not Oilsands?
  • 5 hours "The Gasoline Car Is a Car With a Future"
  • 17 hours EVs Could Help Coal Demand
  • 1 day WE Solutions plans to print cars
  • 5 hours Sell out now or hold on?
Shale Shifts Attention To This ‘Forgotten’ Oil Play

Shale Shifts Attention To This ‘Forgotten’ Oil Play

As the Permian becomes overcrowded,…

Panama Canal Dispute a Drag on LNG

The expansion of the Panama Canal promises to usher in a new era of extra-large container ships that can speed up international shipping and cut costs. But a dispute between the project’s operator and the Panama Canal Authority has halted construction and threatened to delay the canal’s December 2015 completion date. This is causing discomfort for shippers around the world, including producers of LNG in the U.S. trying to ship LNG to Asia.

Cost overruns have piled up and the expansion of the canal is expected to reach $7 billion, up from an original estimate of $5.25 billion. The Panama Canal Authority and its Spanish contractor, Sacyr, are pointing fingers at each other. The dispute over who should pay for the higher costs had led to a full stop in construction for two weeks. Delays could have ripple effects through other industries. Shippers are building neo-Panamax ships around the world – ships that are longer, wider, and deeper than their predecessors. An estimated 214 neo-Panamax ships are under construction in anticipation of an expanded Panama Canal.

Related Article: DOE Approves Sixth LNG Export Terminal

In particular, U.S. shippers of LNG are eyeing their customers in Asia, who are forced to pay prices nearly six times higher than the going rate in America. Currently, the Panama Canal is too small to handle many LNG ships, but the expansion will allow them to pass through. Ports on the East Coast of the U.S. are also undergoing billion dollar renovations in order to service neo-Panamax ships.

"It's very important to us to see the canal completed," said Bill Cooper , president of the Center for Liquefied Natural Gas, according to The Wall Street Journal. "Otherwise you're adding a significant amount of time to go all the way around South America, and a significant cost."

The Wall Street Journal reports that many Asian buyers of LNG are putting off signing long-term contracts due to uncertainty over when the Panama Canal will finally be completed. However, a deal is expected soon, which may involve financial assistance from the Spanish government.

By Charles Kennedy



Join the discussion | Back to homepage

Leave a comment

Leave a comment

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