LNG via Panama Canal | Russell T. Rudy Energy LLC
“World Oil” reports that the first cargos of U. S. origin Liquefied Natural Gas (LNG) will enter the Panama Canal this week. This is significant for several reasons. Exports of LNG will expand the market for domestic natural gas and help firm, or hopefully improve, prices. Also, with the expansion of the Panama Canal, LNG tankers can now use the canal rather than sail around the tip of South America to get to the Pacific Ocean. This will reduce the distance from the Gulf of Mexico to Asia from about 16,000 miles to 9,000, making our LNG more competitive in those markets.
Currently, only Cheniere Energy’s Sabine Pass LNG plant in Louisiana is exporting LNG. Royal Dutch Shell owns the entire output of the single process train in operation at this time. The first cargo to enter the canal will be Shell’s “Maran Gas Apollonia”. This vessel’s destination is not known.
The Apollonia will be closely followed into the canal by BP Plc’s “British Merchant” in route to Manzanillo on Mexico’s Pacific coast.
The shale revolution resulted in a surge in domestic natural gas production. In order to find markets for the gas, a number of LNG plants have been constructed to convert the gas to liquid form for export to foreign markets. Previously, the U. S. had been a net importer of LNG, but that is changing. The Sabine Pass facility is expected to double output to 9 million tonnes per annum (mtpna), or 1.3 billion cubic feet per day (bcf/d), by the end of this year when a second process train comes on line. By 2019 total U. S. LNG exports are expected to reach 60 mtpna, or 8.6 bc/d.
To read the article in its entirety, please go to http://www.rigzone.com/news/oil_gas/a/145779/First .
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