30-07-2016

EIA: First LNG tanker through expanded Panama Canal is traveling from Sabine Pass

EIA

On July 25, the liquefied natural gas (LNG) vessel Maran Gas Apollonia became the first-ever LNG vessel to transit the recently expanded Panama Canal. The vessel is carrying LNG sourced from the U.S.-based Sabine Pass liquefaction terminal located in Louisiana. The expanded Panama Canal can now accommodate 90% of the world LNG tanker fleet. Transit through the Panama Canal reduces travel time and transportation costs for LNG vessels traveling from the Atlantic Basin liquefaction terminals, located primarily on the U.S. Gulf Coast, to key markets in Asia and the west coast of South America.

U.S. LNG exports began five months ago with the shipment of the first cargo from Train 1 of the Sabine Pass terminal on February 25. Between February and the end of June, 15 cargoes were shipped from Sabine Pass, totaling 53 billion cubic feet (Bcf) of exports, according to Reuters shipping data. Most of these exports went to South America (35 Bcf), followed by the Middle East and Asia (7 Bcf each), and Europe (4 Bcf). Four additional cargoes were exported earlier this month, totaling 13 Bcf, and another vessel is scheduled to dock at the Sabine Pass terminal today (July 28). The exports from Sabine Pass Train 1 averaged three cargoes per month in March-May, and are projected to average five cargoes per month going forward (assuming full train utilization). Train 2 of the Sabine Pass terminal is expected to begin operations in September, with the remaining three trains coming online in 2017-19.

Currently in the United States, 0.6 Bcf/d of liquefaction capacity is in operation, and another 8.6 Bcf/d is under construction, with expected online dates in 2016-19. Most of U.S. liquefaction capacity is contracted under long-term (20-year) contracts, with a total of 3.2 Bcf/d contracted to Japan, South Korea, and Indonesia. Contracted volumes to these countries will likely transit the Panama Canal as it will allow reduction in travel time and transportation costs. EIA estimates that LNG traffic through the Panama Canal to transport U.S.-contracted volumes to Japan, South Korea, and Indonesia could reach 300 LNG vessels annually.

Source: EIA

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