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Panama Canal expansion will not redefine global LNG trade

The project has been overhyped, and though the wider canal may cut some costs for future US LNG deliveries to Asia, the impact will be limited

The Panama Canal expansion, one of the largest infrastructure projects in the world, has been touted as a development that will redefine the liquefied natural gas (LNG) trade, linking emerging US exporters and eager Asian buyers. But the benefits for LNG players will likely be limited by relatively high transit costs and restricted capacity. At first glance, the expanded canal looks very promising for the LNG industry. To date, no LNG has been shipped via the canal. But that will change when the expansion is completed in late 2015. The enlarged waterway will connect the Pacific and Atlantic basins and will be able to handle more than 80% of the world’s 370 LNG ships, up from just 6% now. 

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