Asia redefines LNG routes

Faced with increasing restrictions on the Panama Canal, South Korean and Japanese LNG importers from the USA are exploring alternative routes, notably via the Suez Canal.

Share:

Flexibilité logistique redéfinit le commerce

The global liquefied natural gas (LNG) industry is facing unprecedented logistical challenges. Asian importers, particularly from South Korea and Japan, faced with restrictions at the Panama Canal, are turning to alternative routes to secure winter LNG supplies. This situation reveals the complexities and vulnerabilities of global energy supply chains.

Kogas and SK E&S strategies for dealing with Restrictions

The Hyundai Princepia, chartered by Korea Gas Corp. (Kogas), is a striking example of this trend. Departing from Sabine Pass in Louisiana, the ship chose the Suez Canal route, avoiding the increasingly constrained Panama Canal. This decision comes against a backdrop of reduced booking slots for Neopanamax locks, affecting various types of vessels, including LNG carriers.

Impact of Weather Conditions on LNG Supply

Weather conditions also play a role in this complex equation. The Korea Meteorological Administration forecasts slightly above-normal average temperatures for South Korea from November 2023 to January 2024. However, the experience of a cold snap last winter, which led to increased electricity consumption and demand for LNG, remains fresh in our minds.

Logistical alternatives for Japanese importers

Meanwhile, Japan, another key importer of US LNG, is also exploring alternatives. Restrictions on the Panama Canal are prompting Japanese importers to consider routes such as the Suez Canal or the Cape of Good Hope, and even LNG cargo swaps. These strategic adjustments are essential to ensure continuity of energy supply in the face of global logistical constraints.
These developments underline a broader trend in the global LNG trade. As the world’s energy markets become increasingly interconnected and interdependent, flexibility and adaptation to change are becoming key skills for industry players. Asian LNG importers are at the forefront of this adaptation, skilfully navigating an ever-changing energy and logistics landscape.

The strategic reorientation of Asian LNG importers, in response to the Panama Canal restrictions, highlights the importance of logistical flexibility in the global energy trade. This trend could redefine LNG trade routes and have long-term implications for global energy supply.

Italian group Eni signs a twenty-year liquefied natural gas supply contract with US-based Venture Global, covering two mn tonnes per year and marking a first for the company from the United States.
The Voskhod vessel, under US sanctions, docked at the Arctic LNG 2 plant in Russia, marking the second visit by a sanctioned ship to the site this year, according to maritime tracking data.
Japan has urgently secured several additional cargoes of liquefied natural gas from the United States to avert an imminent electricity supply shortage caused by rapidly declining national reserves expected at the end of July.
The European Commission has unveiled a proposal to prohibit the import of Russian gas into the Union, sparking intense debate on its feasibility, contractual impact and consequences for supply security among several Member States.
CNOOC Limited announces the discovery of a significant oil and gas reservoir in the buried hills of the Beibu Gulf, opening new opportunities for shallow water exploration off the coast of China.
TotalEnergies’ Mozambique LNG gas project is at the centre of a legal challenge in Washington, following the approval of a $4.7 bn loan by the US Exim Bank, amid security concerns and opposition from civil society groups.
Investors are closely watching U.S. midstream companies’ announcements regarding new gas pipeline expansions targeting promising markets in the West and Northeast, beyond traditional regions in Texas and the Southeast.
PPL Corporation and Blackstone Infrastructure announce a strategic partnership to develop new gas-fired power plants to supply electricity to data centers through long-term contracts in Pennsylvania.
Falcon Oil & Gas Ltd announces a new record initial flow test result at the Shenandoah S2-2H ST1 well and the start of its 2025 drilling campaign in the Beetaloo Basin.
The Azule Energy consortium has identified a significant gas and condensate field during Angola’s first exploration drilling dedicated to gas, marking a milestone for the country's energy sector.
Technip Energies has secured a contract to lead preparatory works for a floating liquefied natural gas unit in Africa, confirming its presence in the international gas infrastructure market.
The Slovak government is seeking guarantees from the European Union to secure its supplies as talks continue over ending Russian gas and adopting a new round of sanctions.
ArcLight Capital Partners announces the acquisition of Middletown Energy Center, a combined-cycle natural gas power plant, aimed at meeting the substantial rise in energy demand from data centers and digital infrastructure in Ohio.
The commissioning of LNG Canada, the first major Canadian liquefied natural gas export facility led by Shell, has not yet triggered the anticipated rise in natural gas prices in western Canada, still facing persistent oversupply.
Horizon Petroleum Ltd. is advancing towards the production launch of the Lachowice 7 gas well in Poland, having secured necessary permits and completed preliminary works to commence operations as early as next August.
European Union member states have requested to keep their national strategies for phasing out Russian gas by 2027 confidential, citing security concerns and market disruption risks, according to a document revealed by Reuters.
TotalEnergies becomes a member of PJM Interconnection, expanding its trading capabilities in North America's largest wholesale electricity market. The decision strengthens the company's presence in the United States.
Turkey has connected its gas grid to Syria’s and plans to begin supplying gas for power generation in the coming weeks, according to Turkish Energy Minister Alparslan Bayraktar.
Despite record electricity demand, China sees no significant increase in LNG purchases due to high prices and available alternative supplies.
US natural gas production and consumption are expected to reach record highs in 2025, before slightly declining the following year, according to the latest forecasts from the US Energy Information Administration.