Panama Canal Not Economical For US-Asia LNG Shipments: Cheniere

Cheniere is avoiding the Panama Canal to ship LNG from the US to Asia because it is not economical, COO Corey Grindal said.

• "We use the canal when it is economical to do so, right now it is not. Right now, the market in the Far East is not supporting it, and the waiting time, with us not being a priority customer, is just not worth us using it right now," Grindal said.
• Instead, ships are sailing through the Suez Canal or a month-long journey around South Africa’s Cape of Good Hope.
• The Panama Canal will likely keep restrictions on shippers in place this year as a drought has caused water levels at its main lake to drop to a four-year low as of end-June, leading to a line of ships waiting to transit the waterway.
• Cheniere continues to be optimistic about growing Asian market and expects there will be increased demand from countries in South and Southeast Asia, CCO Anatol Feygin said.
• However, some countries with large gas-reliant economies but poor credit ratings have had a difficult time figuring out how to enter into long-term agreements with purely commercial exporters like Cheniere, Feygin added.
• "They tend to rely more on state-to-state agreements. Obviously that is not something we can participate in. We see Thailand, Philippines as very attractive markets," he said.
• Feygin expects China to import 100mn metric tons/yr in the future, up from about 64mn metric tons last year, he said.