Panama Canal Authority plans to add additional LNG transit slots
Additional reserved LNG transit slots may be added by the Panama Canal Authority in the future to resolve the rise in US exports via the shortest route from the Gulf Coast to the main import market in East Asia.
In late October, delays of up to more than a week for LNG tankers moving through without a reservation began and have recently continued.
According to agency data, the Canal facilitated 53 LNG transits last month, up from 35 in October, and 48 in November 2019. The Canal is currently facilitating an average of about 36 transits a day for total vessel traffic.
A combination of factors, including fog, higher-than-average arrivals and additional safety measures to avoid further spread of the coronavirus has been blamed for the delays. Looking ahead, the Canal Authority needs to look at long-term options as US LNG export activity increases and more capacity is expected to come online by 2024.
Currently, the Canal Authority retains two LNG tanker booking slots per day. On several days depending on the transit combination and the operating conditions, it was able to handle four vessels on a given day.
It could regularly handle up to two LNG tankers in the northbound direction and one in the southbound direction on a regular basis under current restrictions on the type of vessel.
A significant pickup in US LNG exports to Asia has been stimulated by higher spot prices, backed by a ramp-up in new export capacity. Long waiting times for unreserved vessels on the Panama Canal, however, have also forced many US LNG cargoes to sail eastwards, completely avoiding the Canal and adding significant costs to the overall journey.
The delays caused by the increased demand for slots pushed the average transit time per vessel to approximately 3.6 days, a rise of 66 percent over last year and exceeding last fall's record wait times. It took more than 200 hours for at least seven vessels to reach the River, with two vessels taking over 10 days to make the journey.
Maritime Business World