• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 5 hours Science: Only correct if it fits the popular narrative
  • 54 mins Crazy Stories From Round The World
  • 2 days EU has already lost the Trump vs. EU Trade War
  • 17 hours What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 24 hours Do The World's Energy Policies Make Sense?
  • 1 day China's Renewables Boom Hits the Wall
  • 8 hours Iran Burning: Shock Gas Price Hike Triggers Violent Protests After Subsidy Cuts
  • 4 hours Impeachment Nonsense
  • 1 day Forget out-of-date 'dirty oil' smear, Alberta moving to be world's cleanest oil industry
  • 8 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 2 days Water, Trump, and Israel’s National Security
  • 2 days Tesla Launches Faster Third Generation Supercharger
  • 17 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"

Breaking News:

Russia Plans To Boost Crude Oil Exports

A ‘Latin Spring’ In The Making?

A ‘Latin Spring’ In The Making?

There is a fear within…

A Bear’s Guide To Oil Markets

A Bear’s Guide To Oil Markets

2019 hasn’t been the year…

Wider Panama Canal will Allow US LNG to Reach Asian Market

Growing Asian demand is expected to offer the largest market potential for LNG producers over the next couple of decades, and it seems as though the US may be positioning itself to take full advantage of that demand growth, to the chagrin of other global exporters.

Ever since the shale revolution which has flooded the US with an overabundance of cheap natural gas, LNG projects in Australia, East Africa, Canada, and Russia have been unable to rely on the US market, moving focus almost entirely to Asia.

Related Article: Australia NSW to Become Natgas Boom Region?

Traditionally these exporters have held an advantage over the US, whose Gulf Coast based refineries make tanker trips to Asia much longer and therefore less competitive, but a proposed widening of the Panama Canal will allow the passage of US LNG tankers, cutting the trip length from 16,000 miles to just 9,000 miles, and allowing US exporters to compete in the Asian market.

Tankers squeeze through a lock on the Panama Canal
Tankers squeeze through a lock on the Panama Canal. (GlobalMotiv)

Currently only 21 of the 320 strong US LNG tanker fleet could move through the Panama Canal, but none of them take the risk, yet once the widening project is complete, by the end of 2015, over 80% of the tankers will be able to use the waterway.

By widening the Panama Canal, the US can compete in terms of trip length and costs, but then it has an advantage over other exporters due to the existing Gulf Coast infrastructure and expertise from when it was the world’s largest LNG importer. New facilities on the undeveloped coasts of Mozambique and Tanzania, the harsh Russian Arctic, and the remote wilderness of Australia and Canada, cannot compete on the same level.

Related Article: Pessimism and Optimism over Utica Shale

Asish Mohanty, a senior analyst on North American LNG at Wood Mackenzie, told Reuters that “the cost stacks to Asia from the five major supply options end up in a very similar range... but the U.S. brings a unique proposition, and so might be getting a lion's share of that extra demand.

We expect around 45 to 50 million tonnes a year of U.S. exports - all starting up before 2020 - with the rest to be shared amongst the others.”

This means that the US should win about a third of the 150 million tonnes a year of extra LNG demand that is expected to appear from the Asian market.

By. Joao Peixe of Oilprice.com



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play