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Commissioner discusses LNG exports with Japan

LNG Industry,

Last week, Commissioner William P. Doyle of the Federal Maritime Commission (FMC), met with Japanese officials to discuss US natural gas exports and the Panama Canal.

The US is to become an important supply of liquefied natural gas (LNG) in the coming years. With the widening of the Panama Canal expected to be completed in 2015, LNG exported from the US to Asia would save almost two weeks transit time if the canal is used. Currently, there are no LNG tankers using the Panama Canal.

Panama Canal expansion

"Japanese officials are interested in learning more about the tolls and cost structure associated with LNG tankers transiting the Canal," said Commissioner Doyle. "It's important that the toll structure and economics work for all parties - Panama wants LNG business which it does not have right now – natural gas produced in the US must compete on the world market with LNG from Russia, Australia and the Middle East - and Asia is where the demand will come from." Japanese interests have actively pursued discussions with the Panama Canal Authority (ACP) on transit costs. The Japanese Shipowners Association and some of its auto-manufacturers were one of the first groups to engage in talks with the ACP.

ACP officials have been conducting meetings with all sectors of the maritime industry on the waterways toll structure. In early October, ACP administrator Jorge Quijano met with the Union of Greek Shipowners, the International Association of Independent Tanker Owners (INTERTANKO) and the International Association of Dry Cargo Shipowners (INTERCARGO) in Greece.

The ACP is also in talks with the Society of the International Gas Tankers and Terminal Operators (SIGTTO) to determine how it can best serve the LNG market. SIGTTO's purpose is to promote shipping and terminal operations for "liquefied gases which are safe, environmentally responsible and reliable." Doyle expressed his commitment to work with the Japanese to ensure usage of the expanded Panama Canal is a success.

LNG fuel funding

In other news, the Secretary of Transportation, Anthony Foxx and Acting US Maritime Administrator, Paul Jaenichen, announced that that the maritime administration would provide funding for two projects supporting the increased use of alternative fuels and technology in the maritime industry. The funds will be used to collect information on use of LNG for marine propulsion and study the issues and challenges associated with shore side storage and bunkering of LNG vessels.

Adapted from press release by Katie Woodward

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