News

Panama is exploring a new type of ocean-to-ocean canal. Instead of a waterway, Panama is in talks to build a new Liquified Petroleum Gas (LPG) pipeline across the country, connecting the Pacific and Atlantic.

The government recently signed a Memorandum of Understanding (MOU) with Dallas-based Energy Transfer LP to study the feasibility of joint participation in a Trans-Panama Gateway Pipeline project. While the announcement was short on details, the signing ceremony was attended by Panama President Laurentino Cortizo Cohen and Energy Transfer Executive Chairman Kelcy Warren, suggesting it is a big deal.

In many ways, the proposal illustrates Panama’s potential to continue to grow its economic base for generations and solidify its role in international trade. The pipeline could join the Canal, mining, and logistics as major contributors to the annual economy. International analysts are citing the diverse economic base as one of the reasons the country is expected to bounce back quickly from the pandemic.

The pipeline would expand Energy Transfer’s international operation “while providing Panama the opportunity to establish itself as a distribution center of petroleum products to markets globally,” according to the press release.

The general proposal outlined in the announcements calls for the development, construction, and operation of a terminal on the Pacific side of Panama and another on the Atlantic side connected by a pipeline, specifically for the “the receipt, transportation, and export of liquified petroleum gas (LPG) to international markets.”

The next step will be a series of “joint feasibility studies and an economic analysis related to the transportation of LPG in Panama,” according to the release.