Cheniere bypasses the Panama Canal for longer LNG routes to Asia Ship’s crew

Reuters

By Curtis Williams

VANCOUVER, July 10 (Reuters) – Top US LNG exporter Cheniere Energy is avoiding the Panama Canal to ship liquefied natural gas to Asia because the market does not support using the waterway, Chief Operating Officer Corey Grindal said on Monday.

The Panama Canal has historically been used by LNG exporters on the US Gulf Coast to ship LNG across the Pacific Ocean to Asian customers. But a months-long drought has caused delays and depth restrictions for the largest ships reaching the canal.

“We use the canal when it is economical, but at the moment this is not the case. At the moment the Far East market doesn’t support it and as we are not a priority customer it’s just not worth the wait for us to take advantage of it now,” Grindal said in a media briefing at an LNG conference.

Other routes to Asia include a trip through the Suez Canal or a month-long voyage around the Cape of Good Hope in South Africa.

Cheniere remains excited about the possibility of a growing Asian market and anticipates increased demand from countries in South and Southeast Asia, said Chief Commercial Officer Anatol Feygin.

However, some countries with large gas-dependent economies but poor credit ratings have struggled to secure long-term deals with purely commercial exporters like Cheniere, Feygin said.

“They tend to rely more on agreements between states. Of course we can’t take part in that. We see Thailand and the Philippines as very attractive markets,” he said.

Feygin expects China to import 100 million tons a year going forward, up from about 64 million tons last year, he said.

“China will be the biggest LNG buyer this year.”

(Reporting by Curtis Williams in Vancouver; Editing by Tom Hogue)

(c) Copyright Thomson Reuters 2023.

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