• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 10 hours How Far Have We Really Gotten With Alternative Energy
  • 12 mins Bad news for e-cars keeps coming
  • 11 days What fool thought this was a good idea...
  • 9 days A question...
  • 14 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 15 days They pay YOU to TAKE Natural Gas

Panama Canal Restrictions Add to U.S. LNG Price Tag

Restrictions on shipping via the Panama Canal due to drought have made the transportation of U.S. LNG to Asia more expensive, widening the gap between Asian and European LNG prices.

Per a Bloomberg report, the price premium for Asian to European gas deliveries for the summer of 2024 has soared twofold since October. The premium for winter 2024 deliveries has also increased because of the drought-related restrictions.

Earlier this month the Panama Canal authorities said they would reduce the number of available slots due to a severe drought, per a Reuters report.

"The recorded precipitation for October has been the lowest on record since 1950 (41% below), and so far, 2023 ranks as the second driest year for the same period," the Panama Canal Authority said, adding this drought had reduced the water level in the reservoir that floats ships through the canal.

The situation is pushing freight costs higher elsewhere as well in a knock-on effect as vessels delayed at the Panama Canal become unavailable for use on other trade routes, according to the Energy Information Administration.

U.S. exports of liquefied natural gas reached a record high during the first half of the year, averaging 11.6 billion cu ft daily, the Energy Information Administration reported last month. This was up 4% on the year and came despite a decline in exports in May and June, the EIA noted.

The top destination for U.S. LNG was the Netherlands—it received the most LNG for five consecutive months this year, through September. Japan came second, followed by France, South Korea, and Italy.

Currently, LNG export facilities in the United States have a combined operating capacity under real-world operating conditions of 11.4 billion cu ft daily. There is another 7.3 billion cu ft daily of capacity under construction, while a further 18.3 billion cu ft daily of possible LNG export capacity has received full regulatory approval from the U.S. Department of Energy and the Federal Energy Regulatory Commission.


By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News