Panama Canal pumps up LNG shipping volume
Date: Wednesday, May 2, 2018
Source: American Shipper
The Panama Canal’s role in the liquefied natural gas (LNG) supply chain continues to grow at a rapid rate.
In fiscal year 2018, the Panama Canal is expected to handle 244 transits from LNG tankers, up from 163 in fiscal year 2017, the Panama Canal Authority (ACP) said. The Panama Canal’s 2018 fiscal year runs from Oct. 1, 2017, through Sept. 30, 3018.
Currently, the Panama Canal provides seven booking slots to LNG shippers per week, which average 5.5 transits per week. However, the canal can handle more transits when needed during uncharacteristically high periods of use, the ACP said, noting how on April 17 for example, the canal transited three LNG tankers.
This past weekend, the Panama Canal welcomed the inaugural transit of the LNG Sakura as it carried the first-ever LNG shipment from Dominion Energy’s new Cove Point terminal in Lusby, Md., to Japan.
The LNG Sakura carried the first shipment of the 0.8 million tons of LNG contracted per year by the Japanese energy company Kansai Electric, which holds a 70 percent share in the Bahamas-flagged Neopanamax vessel, with NYK owning the remaining 30 percent share, according to ACP.
The Cove Point terminal is the second U.S. LNG export terminal to come online after Sabine Pass began operations in 2016. The two main clients at the Cove Point terminal are ST Cove Point, a consortium consisting of Sumitomo Corp. and Tokyo Gas, and Gail Global LNG, a subsidiary of GAIL LTD of India.
“As the global demand for LNG continues to grow, the Panama Canal remains committed to offering an efficient and safe transit that will benefit its customers, reducing travel times and unlocking new opportunities for world trade,” the ACP said.
“With the Panama Canal expansion finally completed, the voyage distance from the US Gulf Coast to Japan has now been reduced to 9,500 nautical miles (nm), compared to the 14,400 nautical miles when the Suez Canal is used,” according to the International Gas Union’s 2017 World LNG Report. However, it said, “Price parity between the Atlantic and Pacific has limited Atlantic basin volumes from flowing through the canal to access the Asian market.”
Overall though, the Panama Canal can handle LNG tankers up to 180,000 cubic meters, or 91 percent of the global LNG fleet, the report said.
The Panama Canal’s expansion also is seeing huge benefits from the container-shipping sector, with 289 containerships averaging 6,052 TEUs routinely utilizing the waterway, according to BlueWater Reporting’s Capacity Report. At the end of April 2016, 283 vessels averaging 4,816 TEUs routinely were using the waterway.
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