EIA: LNG shipments through Suez Canal decline in recent years

The flow of LNG through the Suez Canal has declined over recent years due to competition for the chilled fuel in the global market as well as growth in the U.S. shale gas production, the Energy Information Administration (EIA) said.

The Suez Canal and the Suez-Mediterranean pipeline (Sumed) are strategic routes for Persian Gulf crude oil, petroleum products, and liquefied natural gas (LNG) shipments to Europe and North America.

Located in Egypt, the Suez Canal connects the Red Sea with the Mediterranean Sea, and it is a critical chokepoint because of the large volumes of energy commodities that flow through it.

Chokepoints are narrow channels along widely used global sea routes that are critical to global energy security.

According to EIA, total oil flows through the Suez Canal and the Sumed pipeline accounted for about 9 percent of total seaborne traded petroleum in 2017, and LNG flows through the two accounted for about 8 percent of global LNG trade.

Overall LNG flows through the Suez Canal have declined in recent years. Some 98 percent of the northbound LNG transit is from Qatar and mainly destined for European markets.

Although Qatar remains a key exporter of LNG through the canal, it has been diverting more cargoes to Asia in recent years, EIA said.

Changes in LNG traffic through the Suez Canal also reflect the growth in U.S. shale gas production and LNG exports, falling LNG demand in some European countries, and competition for LNG in the global market, especially in Asia.