The Panama Canal Authority (ACP) is moving forward with plans to construct a liquefied petroleum gas (LPG) pipeline across the isthmus, aiming to streamline energy transport between the Atlantic and Pacific Oceans. This initiative is designed to meet the increasing demand from Asian markets, particularly Japan, for U.S.-sourced LPG.
The proposed pipeline would allow LPG vessels to offload cargo on one side of the canal, with the gas then transported across the isthmus and reloaded onto ships on the opposite side. This system is expected to alleviate congestion in the canal and enhance the efficiency of LPG transshipment operations.
ACP Administrator Ricaurte Vásquez highlighted the project’s significance, noting that initial studies suggest the pipeline could transport up to one million barrels per day (bpd) of LPG, with potential expansion to two million bpd within a decade. “Meeting the growing demand for gas through Panama is a top priority, though it presents considerable complexity,” Vásquez stated.
The pipeline project is part of the ACP’s broader strategy to diversify and modernize canal operations. Following a Supreme Court decision last year that returned adjacent areas to the canal’s administration, the ACP has accelerated plans to expand transshipment and storage infrastructure. An $8 billion investment has been earmarked over the next decade for infrastructure and sustainability projects, including the construction of a new reservoir to address water scarcity issues that have previously impacted canal operations.
The ACP plans to open the bidding process for the pipeline’s construction and operation in the coming months, seeking participation from companies with the requisite technical and commercial expertise. This development underscores Panama’s commitment to maintaining its strategic role in global energy logistics and adapting to evolving trade dynamics.
