The News Coming Out Of The Panama Canal Expansion Is Staggering -- To Say The Least -- It's Only Just Begun -- July 29, 2016

This story was linked earlier, but it will be lost in the chaff. Here is it again, as a stand-alone, from Platts.

It has been quite a year for the US LNG industry.

In February, Cheniere’s Sabine Pass LNG terminal exported the continental US’ first commercial cargo of LNG.

Since February, Cheniere’s Train 1 at Sabine Pass, the only fully commissioned operating US LNG export terminal, has exported 19 cargoes to eight different nations on three continents.

While South America has so far received more US LNG cargoes than any other region, the re-opening of the newly expanded Panama Canal could drive new competition from North Asian markets. While many expected the majority of Cheniere’s cargoes to end up on Europe, ten of the first 16 cargoes (three are out at sea) have delivered into South America, specifically Brazil, Chile and Argentina. Only two cargoes have delivered into Europe.

Cheniere’s first cargo was delivered to Rio de Janeiro, Brazil’s furthest regasification terminal from Sabine Pass. Depending on what terminal you deliver into Brazil, shipping a cargo of LNG from the US Gulf Coast can take between 11 and 16 days. Delivery into either of Argentina’s two terminals takes roughly 21 days.

The expanded Panama Canal will allow US LNG producers to deliver their cargoes to select destinations in South America and Asia faster and cheaper. Chile is a good example: when travelling around the southern tip of South America, an LNG vessel departing from Sabine Pass must travel 9,507 nautical miles over 30 days to deliver into Chile’s Mejillones terminal. Through the Panama Canal, the trip is cut down to just 3,607 nautical miles, lasting about 11 days.

A shorter trip to North Asia through the Panama Canal means South American LNG importers will now face new competition for US LNG supply.

Before the opening of the Panama Canal, the idea of sending a cargo of US LNG to North Asia seemed like a pretty far off idea. Via the Suez Canal, a US Gulf Coast laden LNG vessel must travel around 47 days and 14,500 miles to reach Tokyo Bay. Around the Cape of Good Hope, the trip is 15,689 nautical miles, lasting 50 days. Through the Panama Canal, the trip is cut down to 29 days and a distance of 9,214 nautical miles.

Much, much more at the link.