The Analyst

Panama transit could speed LNG market integration

By Peter Stewart 6 July 2016 15:17 GMT
The Panama Canal's western end, at Panama City. The canal is a vital trade link. (PA) The Panama Canal's western end, at Panama City. The canal is a vital trade link. (PA)

The Panama Canal Authority inaugurated a new set of locks last month that allow larger ships through the strategic waterway. With LNG exports from the United States increasingly set to compete in the global LNG market, this could speed up the development of LNG benchmarks for the key Asian market.

The inauguration of a third set of locks at the 102-year old canal on 26 June will allow the transit of LNG tankers with a capacity of around 110 million cubic metres (MMcm) of gas as LNG. Before the expansion, the maximum size was less than 20 MMcm. In terms of vessel numbers, this will expand the portion of the LNG fleet that can transit the canal from just 6% to 90%, according to the Energy Information Administration (EIA).