Growing US production of natural gas is impacting Latin America and giving added impetus to the expanded Panama canal with the regular transit of giant LNG   vessels.

BY ALEX WOOD, LISA VISCIDI, AND JASON FARGO

The global natural gas market is changing dramatically as a result of surging US shale production. Due to its geographical proximity and growing gas demand, Latin America and the Caribbean has emerged as a top market for US liquefied natural gas (LNG), according to a report from the Energy, Climate Change & Extractive Industries Program.

The next few years will see a major shift in the hemispheric natural gas trade, as increased US LNG exports increasingly displace volumes from other exporters, argue the authors.

US LNG exports to Latin America and the Caribbean spiked to over 200 million cubic feet last year since the first cargoes went out in 2016.

Trade in the Americas is important to US exporters facing a global LNG supply glut as well as importers in the region that are looking to diversify fuel sources.  Commercial developments, such as more flexible contract terms, and emerging technologies like small-scale and floating LNG, are making regional gas trade more liquid and allowing new markets to open up. Policy developments will also impact LNG trade in the Americas, from proposals in the US to facilitate small-scale LNG exports to new restrictions on large hydroelectric dams in Brazil.

The largest markets for LNG imports in the region have been Mexico and Brazil. But, other markets, such as the Caribbean and Central America, have significant potential for growth.

* The report is authored by Alex Wood, Policy Analyst at the US Department of Energy, Lisa Viscidi, Energy, Climate Change and Extractive Industries Program Director at the Inter-American Dialogue, and Jason Fargo, Latin America Team Leader at Energy  Intelligence Group.