A study has been announced by the Panamanian government and its partner Energy Transfer to study the prospects of building a liquid petroleum gas pipeline, running beside the existing Panama Canal that links the Atlantic Ocean with the Pacific Ocean.

If the project is given the go ahead, it would involve the development, construction, and operation of a terminal on the Pacific side and another on the Atlantic side connected by a pipeline for the receipt, transportation, and export of liquified petroleum gas (LPG) to international markets. Any decisions made by the parties will be based on the outcomes of joint feasibility studies and an economic analysis related to the transportation of LPG in Panama.

At present, the congested Panama Canal is extremely popular with LNG carriers transport gas exports from the United States to markets in North Asia. Also subject to capacity restrictions, due to ongoing water shortages, caused by low rainfalls in the region, which limit the number of vessels that can transit the Panama Canal at any time.

Building such pipelines along a major maritime canal is not a new idea. Since the Suez Canal has operated crude oil pipelines linking its northern end with its southern end, to lighten oil tanker loads, to enable such vessels to pass through the Canal.