Threats to halt work on the $5.25 billion Panama Canal expansion could potentially affect the economics of US LNG exports. The Spanish-led GUPC consortium has said it will stop building a third set of locks by Jan. 20 unless the canal authorities repay $1.6 billion it claims it is owed for cost overruns. The new locks would enable 80% of the global LNG fleet to transit the canal, up from 20% now, and US project developers spearheaded by Cheniere Energy — whose Sabine Pass project is due on line in the second quarter of 2015 — plan to use the waterway as a relatively quick, and cheap, route to Asia (WGI Oct. 2' 13). But if the work stretches much past its current June 2015 completion date — already nine months later than originally planned — Asian buyers may rethink US purchasing plans, in turn delaying future US export projects without firm offtakers.
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