popular articles

Panama Canal Restrictions: Impact on Japanese LNG Shipping

Japanese LNG carriers are exploring alternative routes and considering cargo swaps in response to increasing restrictions on the Panama Canal.
GNL japonais nouvelles routes logistiques

Please share:

Japanese liquefied natural gas (LNG) carriers face a logistical dilemma due to impending restrictions at the Panama Canal. These restrictions, caused by the worst drought in seven decades, are leading to a significant reduction in booking slots for the Neopanamax locks, used in particular by LNG carriers. This situation is prompting industry players to seriously consider alternatives for the routing of their winter cargoes.

Alternative Options for Japanese LNG Transportation

From December 1, the number of available slots will be reduced from seven to six, then to five from January 1, 2024. These cuts have a direct impact on LNG transport operations, a vital resource for the Japanese economy and industry. In 2021, delays in the departure of cargo ships from the Panama Canal had already seriously affected Japan’s LNG supply, exacerbated by severe cold snaps.

Economic and Logistical Consequences of Canal Restrictions

Japanese carriers, who only receive 8% of their total LNG imports from the USA, must now evaluate options such as routes through the Suez Canal or the Cape of Good Hope. These alternative routes have significant disadvantages in terms of time and cost. The journey via the Suez Canal takes just over a month to reach Japan, while that via the Cape of Good Hope takes around 40 days, compared with just over 20 days via the Panama Canal.

LNG Cargo Optimization and Exchange Strategies

Options also include the exchange of LNG cargoes between the Pacific and Atlantic oceans. These exchanges could optimize transport and mitigate the impact of canal restrictions. Hiroshi Hashimoto, from Japan’s Institute of Energy Economics and Security, underlines the growing importance of these optimization strategies in response to prolonged low water levels.
Despite a relatively mild weather forecast for the winter of 2023-24, an unforeseen change in weather conditions could disrupt timely LNG supplies, particularly from the USA. This could not only affect preparations for next winter, but also call into question the viability of the Panama Canal as a base route for annual LNG delivery schedules from 2024 onwards.

The current crisis at the Panama Canal represents a turning point for Japanese LNG shipping, forcing carriers to reconsider their logistics strategies. While new routes and cargo swaps are emerging as potential solutions, the long-term impact on Japan’s LNG supply and associated costs remains a major concern for the industry.

Register free of charge for uninterrupted access.

Publicite

Recently published in

Shell has finalised the acquisition of Pavilion Energy in Singapore, integrating a portfolio of 6.5 mtpa LNG contracts, regasification capacity, and bunkering activities.
The potential lifting of U.S. sanctions on the Arctic LNG 2 project paves the way for a rapid resumption of Russian liquefied natural gas exports, significantly impacting global markets from the third quarter of 2025.
The potential lifting of U.S. sanctions on the Arctic LNG 2 project paves the way for a rapid resumption of Russian liquefied natural gas exports, significantly impacting global markets from the third quarter of 2025.
Prairie Provident Resources closed 2024 with a reorganisation of its assets and a strategic focus on the Basal Quartz formation, backed by capital raises and revised reserve estimates.
Prairie Provident Resources closed 2024 with a reorganisation of its assets and a strategic focus on the Basal Quartz formation, backed by capital raises and revised reserve estimates.
The Republic of Congo enhances its gas capabilities with the floating platform Nguya, which will add 2.4 million annual tonnes of liquefied natural gas (LNG), solidifying its position in the global market starting in 2025.
The Republic of Congo enhances its gas capabilities with the floating platform Nguya, which will add 2.4 million annual tonnes of liquefied natural gas (LNG), solidifying its position in the global market starting in 2025.
TotalEnergies welcomed the launch of a criminal investigation in Mozambique into allegations of crimes committed by security forces near its suspended gas project in Cabo Delgado province.
Baker Hughes will provide integrated coiled-tubing drilling services to Dubai Petroleum Establishment as part of the Margham gas storage project, reinforcing its role in the emirate’s energy security.
Baker Hughes will provide integrated coiled-tubing drilling services to Dubai Petroleum Establishment as part of the Margham gas storage project, reinforcing its role in the emirate’s energy security.
Algeria announces an ambitious goal to increase its annual natural gas production to 200 billion cubic meters within five years, supported by significant investments and strategic infrastructure projects aimed at the international market.
Algeria announces an ambitious goal to increase its annual natural gas production to 200 billion cubic meters within five years, supported by significant investments and strategic infrastructure projects aimed at the international market.
Europe is considering various energy strategies up to 2050, revealing highly variable costs and an uncertain future for natural gas demand amid political pressure to achieve carbon neutrality at lower costs.
Europe is considering various energy strategies up to 2050, revealing highly variable costs and an uncertain future for natural gas demand amid political pressure to achieve carbon neutrality at lower costs.
The global liquefied natural gas engine market is expected to double by 2033, fuelled by energy diversification policies, growing refuelling infrastructure and demand for cost-effective transport solutions.
The $4.7bn financing granted by the US Exim Bank to the Mozambique LNG project reignites tensions in the United States over foreign energy policy and national interests.
The $4.7bn financing granted by the US Exim Bank to the Mozambique LNG project reignites tensions in the United States over foreign energy policy and national interests.
A study by Wood Mackenzie concludes that liquefied natural gas exported from the United States to Europe generates on average half the emissions of imported coal, when considering the full lifecycle.
A study by Wood Mackenzie concludes that liquefied natural gas exported from the United States to Europe generates on average half the emissions of imported coal, when considering the full lifecycle.
Slovak Prime Minister Robert Fico acknowledged on 20 March significant technical difficulties obstructing a proposed gas swap deal with Azerbaijan, while reaffirming the urgency of restoring Russian gas transit through Ukraine.
Slovak Prime Minister Robert Fico acknowledged on 20 March significant technical difficulties obstructing a proposed gas swap deal with Azerbaijan, while reaffirming the urgency of restoring Russian gas transit through Ukraine.
The Canadian government is financially backing the Cedar LNG project, a gas infrastructure led by the Haisla Nation and Pembina, with an investment of up to $200mn.
In 2025, Europe faces gas reserves well below usual levels, leading to rising prices and increased pressure on industrial competitiveness amid geopolitical and climatic tensions.
In 2025, Europe faces gas reserves well below usual levels, leading to rising prices and increased pressure on industrial competitiveness amid geopolitical and climatic tensions.
Alpha Generation, LLC plans to add 450 MW of power generation capacity across four existing sites in Maryland, New Jersey, and Ohio. This initiative aims to meet the growing energy demand under PJM’s Reliability Resource Initiative.
Alpha Generation, LLC plans to add 450 MW of power generation capacity across four existing sites in Maryland, New Jersey, and Ohio. This initiative aims to meet the growing energy demand under PJM’s Reliability Resource Initiative.
Equinor has begun gas production at Halten East, a NOK 9 billion project in the Norwegian Sea, two years after receiving approval from Norwegian authorities.
Equinor has begun gas production at Halten East, a NOK 9 billion project in the Norwegian Sea, two years after receiving approval from Norwegian authorities.
Siemens Energy has secured a $1.6 billion contract to supply technologies for the Rumah 2 and Nairyah 2 gas power plants in Saudi Arabia. These facilities will add 3.6 gigawatts to the national grid and include 25-year maintenance agreements.
BP has confirmed the cessation of a gas leak at the offshore Grand Tortue Ahmeyim field, located between Senegal and Mauritania. The incident, identified on 19 February at one of the site’s wells, required technical interventions to restore the integrity of the installations.
BP has confirmed the cessation of a gas leak at the offshore Grand Tortue Ahmeyim field, located between Senegal and Mauritania. The incident, identified on 19 February at one of the site’s wells, required technical interventions to restore the integrity of the installations.
The United States reactivates a major loan for TotalEnergies' Mozambique LNG project, stalled since 2021 due to a jihadist attack. The funding should enable a market-anticipated restart by 2030.
The United States reactivates a major loan for TotalEnergies' Mozambique LNG project, stalled since 2021 due to a jihadist attack. The funding should enable a market-anticipated restart by 2030.
ExxonMobil has signed a 20-year contract with ARC Resources for LNG supply from the Cedar LNG project, linked to JKM. The deal marks a significant step in global LNG pricing.
ExxonMobil has signed a 20-year contract with ARC Resources for LNG supply from the Cedar LNG project, linked to JKM. The deal marks a significant step in global LNG pricing.
Africa will experience the fastest growth in natural gas demand by 2050, driven by urbanisation and the need to address the energy deficit, according to the Gas Exporting Countries Forum (GECF) in its report of March 10, 2025.
Under pressure from US sanctions, Iraq explores alternatives to Iranian gas to secure its electricity supply, notably turning to Qatar and Oman, while considering the installation of floating LNG terminals.
Under pressure from US sanctions, Iraq explores alternatives to Iranian gas to secure its electricity supply, notably turning to Qatar and Oman, while considering the installation of floating LNG terminals.
In the context of growing trade tensions with the United States, the European Union strengthens its imports of American liquefied natural gas (LNG) to diversify its energy sources and reduce its dependence on Russian gas.
In the context of growing trade tensions with the United States, the European Union strengthens its imports of American liquefied natural gas (LNG) to diversify its energy sources and reduce its dependence on Russian gas.
Qatar has started supplying natural gas to Syria via Jordan in order to alleviate electricity shortages and support the rebuilding of the country's energy infrastructure.
Qatar has started supplying natural gas to Syria via Jordan in order to alleviate electricity shortages and support the rebuilding of the country's energy infrastructure.

Advertising