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Panama Canal Authority reports LNG tanker transits down 30% in last nine months
PERFORMANCE
ILYA Espino de Marotta, the deputy administra- tor of the Panama Canal Authority (PCA), said last week that the number of LNG tankers pass- ing through the Panama Canal had dropped by nearly a third over the last nine months.
In an interview with Reuters, Espino de Marotta noted that LNG tanker transits through the canal had declined by 30% in the last three quarters. Demand for US-produced gas has been weaker in Asian markets, and this has helped accelerate the downturn by discouraging exports from the US Gulf Coast (USGC) region, she said.
Reuters confirmed her remarks, noting that Asian gas demand has been sluggish in recent months due to warmer-than-anticipated tem- peratures. It also pointed out that Asian buyers have been particularly quick to opt out of buy- ing US LNG because of the high transport costs associated with long-haul shipments from the USGC region.
In the meantime, Espino de Marotta
commented, the shift in Asian gas markets is opening up new opportunities for US LNG pro- ducers in Europe, where demand is definitely growing stronger. “Much of [the] LNG from the US Gulf Coast traditionally going to Asia is being diverted to Europe,” she told Reuters.
The deputy administrator went on to say that LNG tanker transits through the Panama Canal had also dropped in the wake of the fire and explosion that forced the shutdown of the Freeport LNG’s gas liquefaction plant and export terminal on Quintana Island in Texas on June 8. With the plant closed, there are constraints on US LNG export capacity, even though European demand remains strong, she noted.
She also stated that the reduction in LNG tanker transits had been coupled with an increase in transits by some other types of vessels, such as LPG tankers and cruise ships. Nevertheless, she said, PCA does expect the number of LNG shipments to recover during the next fiscal year, which begins in October.™
Pakistan seeks 72 LNG cargoes over six years
POLICY
STATE-OWNED Pakistan LNG has launched a tender for one cargo of LNG per month over a six-year period, or 72 cargoes in total, accord- ing to a document posted on the company’s website.
The tender documents are available until Sep- tember 13, and the last date for submitting bids is September 14. The cargoes would be received at Port Qasim, Karachi, on a delivered-ex-ship (DES) basis.
Media reported that the tender has been issued in two parts. Under the first, bids have been invited for one year – from December 2022 to December 2023 – under which one cargo will be delivered every month. Under the second part, Pakistan will seek one cargo per month, or 60 LNG cargoes in total, over a five-year period from January 2024 to December 2028.
Pakistan receives most of its LNG from Qatar under long-term contracts, meeting additional demand from the spot market. However, rising
prices have made it more challenging for the country to purchase LNG on the spot market in recent months. In July, Pakistan LNG was reported not to have received a single offer in a $1bn tender covering 10 cargoes. In a previ- ous tender, the company received a sole bid, which was reported to be the highest bid it had ever received. It subsequently rejected the offer, which had come from QatarEnergy.
However, this has exacerbated the power generation crisis currently gripping the country. Fuel traders have been reported as saying they are hesitant to sell refined products such as gas- oline and fuel oil to Pakistan on concerns that the country could struggle to make payments. Some banks are also reported to have restricted access to financing for Pakistan’s energy imports, while others have started charging higher rates as a risk premium, making it more challenging still for the country to access the finances needed for energy imports. (See AsianOil Week 31)™
SOUTH ASIA
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w w w . N E W S B A S E . c o m Week 32 12•August•2022