TOKYO (Reuters) – The Panama Canal may carry five times as much LNG in 2020 as it did last year as production of the fuel expands in the US and Asian import demand rises.
LNG volumes traversing the Canal could hit 30 million tpy before the end of 2020, who leads the Panama Canal Authority, up from 6 million tpy.
Demand for LNG has risen significantly in the last three years as the increase of supply, especially from onshore shale fields in the US and offshore reserves in Australia, has made it more competitive. Many countries including China have also been switching to gas more rapidly than expected, away from dirtier coal, for environmental reasons.
The US has only one LNG export facility, at Sabine Pass in Louisiana, which exports via the Panama Canal mostly to North Asia and the Pacific coast of Latin America.
But shipments are expected to surge over the next few years as several US LNG projects are under construction, with total US capacity slated to reach nearly 70 million tpy, up from 18 million t in 2017.
“Right now on average, we’re running six (LNG) vessels per week, but in the very near future, you will have several plants exporting and that starts to add up,” Quijano said in an interview.
US LNG exports through the canal are set to rise to as much as 11 million t this year and to around 20 million t in 2019.
Reflecting a quickening in traffic, three gas tankers transited the Canal in a single day for the first time on 17 April. And since June 2017, there have been 15 days in which two LNG ships passed through the Canal in a 24-hour period.
Shipments of LNG through the Panama Canal began to rise after a third set of locks was added in 2016, and the authority projects growing demand for the supercooled fuel will boost such transits through the early part of the 2020s.
The Canal is already looking beyond the next few years to adding a fourth set of locks, which would serve a new generation of even bigger ships.
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