Panama Canal on LNG

The Panama Canal is introducing a new long-term booking system to attract U.S. liquefied natural gas (LNG) traffic, which has plummeted by 65% due to geopolitical shifts and severe drought affecting water levels at Gatún Lake. Despite these challenges, the canal reported a revenue increase of PAB 4.99 billion, driven by a 1% rise in revenue from the interoceanic route, although heavy-draft transits fell by 21%. The proposed dam on the Indio River aims to secure water supply for the canal's operations, though it faces opposition due to potential displacement of villagers and environmental concerns. The canal's administrator noted that many LNG carriers have opted for longer routes around Cape Horn despite the canal being the shortest passage to Asia, primarily due to high fees and delays. With rising demand in Asia, the canal hopes to recover its LNG traffic as restrictions have eased. However, the economic feasibility of using the canal remains a concern for producers, considering transit costs and global LNG price fluctuations.