The Panama Canal expansion completed in June 2016 was expected to allow much larger LNG tankers to move product from Sabine Pass LNG and other Gulf Coast export terminals through the canal to Asian and Latin American customers. But water levels at Gatun Lake, which provides the fresh water needed to operate the canal’s locks, have been well below normal in recent years, limiting opportunities to use the canal and complicating plans to ramp up LNG flows through it. In today’s RBN blog, we look at the challenges of moving LNG through the Panama Canal, how access to the waterway has been affected by drought and climate conditions over the past decade, and the impact on the LNG market.
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Representatives from U.S. LNG export projects met with the Panama Canal Authority (ACP) a few weeks ago to lobby for an increase in the number of transit slots available to them. LNG carriers (LNGCs) with a capacity above about 30,000 cubic meters can only transit the canal using the Neopanamax locks, which were opened in June 2016 after about nine years of construction. The Panamanian government decided in 2007 to expand the canal, at which time LNG exports from the Lower 48 were not even a blip on the radar screens of U.S. developers. The Shale Revolution was in its infancy, with gas production from shale plays accounting for less than 2,000 Bcf in 2007. That grew to more than 30,000 Bcf per year currently.
The Shale Revolution turned the LNG industry on its head. By 2023, the U.S. had become the world’s largest exporter of LNG, much of it directed toward Asia. In the first wave of U.S. LNG export projects, Asian buyers accounted for 36-37 million tons per annum (MMtpa; 4.8-4.9 Bcf/d) of LNG export capacity, from a total of 65-70 MMtpa (8.6-9.3 Bcf/d). More recently, Chinese buyers accounted for 24 MMtpa (3.2 Bcf/d) of U.S.-sourced LNG, almost all derived from projects coming online since 2022. U.S. project developers have set up marketing offices in China in hopes of signing long-term sales and purchase agreements (SPAs) needed to obtain project financing.
A Q-Flex LNG Carrier, QatarEnergy’s Al Safliya, Moving Through the Panama Canal. Source: gcaptain.com
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About the song
“Canal Street Blues” was written by Joe “King” Oliver and Louis Armstrong. The song was recorded by Ezra Wickemeyer at the Gennett Records recording shed in Richmond, IN, in April 1923. The shed was located in the storage facilities of the Starr Piano and Victrola company located at 309 N. 8th St. in Richmond. The tune is an homage to the famous street in the French Quarter of New Orleans and is a textbook on how authentic New Orleans jazz should be played. All of the band members on the song got their start playing in the clubs around the Storyville section of New Orleans. After the U.S. military shut down Storyville due to crime in the area, King Oliver relocated to Chicago, along with the other members of the Creole Jazz Band. They became the house band at Lincoln Gardens, located at 459 E. 31st St. on the South Side of Chicago from 1922-24, where they would draw huge crowds. Louis Armstrong’s professional career grew in stature as a part of this band. “Canal Street Blues” was released as a 78-RPM single on the Brunswick label in June 1923. It has been covered by many jazz artists over the last century. Personnel on the record were: King Oliver, Louis Armstrong (cornet), Johnny Dodds (clarinet), Baby Dodds (woodblocks), Lil Hardin (piano), Bill Johnson (banjo), and Honore Dutrey (trombone).
King Oliver’s Creole Jazz Band released 14 singles during their tenure in the Roaring Twenties. A collection of their works: King Oliver's Creole Jazz Band with Louis Armstrong-The Complete Gennett Recordings 1923, is still available on vinyl, CD, and download formats. The 1958 Elvis Presley film, King Creole, was based on the 1952 Harold Robbins’ novel, “A Stone for Danny Fisher,” and shot in New Orleans. One has to wonder if the title was drawn from King (Oliver) and Creole (Creole Jazz Band).
Joe “King” Oliver helped create the style of improvisational jazz now known as Dixieland. He made several groundbreaking recordings. The combination of the Great Depression and Oliver contracting a gum disease that made it impossible for him to play anymore led to him relocating to Savannah, Georgia where he worked as a janitor until his death in April 1938. Louis Armstrong became an international superstar and icon of the jazz genre. He released 29 studio albums, four live albums, and 45 singles. He appeared in several films, has a Grammy Lifetime Achievement Award, and is a member of the Rock and Roll Hall of Fame. Armstrong died in New York City in July 1971. Johnny Dodds died in Chicago in August 1940. Baby Dodds died in Chicago in February 1959. Lil Hardin (who became Louis Armstrong’s second wife) died in Chicago in August 1971. Bill Johnson died in New Braunfels, Texas in December 1972. Honore Dutrey died in July 1935 in Chicago.
