The Panama Canal’s $5.25 billion expansion project was completed this week. This will provide LNG shippers from the U.S. Gulf Coast with faster transit routes with the first shipment scheduled by BP Plc for late July.
The 138,517 cubic meter-capacity British Merchant will be sent from Trinidad & Tobago to the Pacific market.
According to the Panama Canal Authority, there are no other LNG tankers scheduled to traverse the Panama Canal this year. Part of this lack of LNG shipments is because U.S. shippers are focusing more on Europe and South America as the price spread to Asian markets is tightening due to lower prices and an oversupplied market.
Though the expansion may have come online at an inopportune time as far as LNG market activity is concerned, it will undoubtedly prove to be a critical piece of the logistical puzzle in matching supply and demand. The authority estimated that 20 million tons of LNG, or 300 ships, will pass through the Panama Canal annually.
“We are thrilled that we currently have 170 reservations for Neopanamax ships, commitments of two new liner services to the expanded canal, and a reservation for the first LNG vessel, which will transit in late July. Our customers care that their supply chain is reliable and that they have a diversity of shipping options. The Canal has always been reliable; today, we offer the world new shipping options and trade routes,” Panama Canal Administrator Jorge L. Quijano said at the ceremony for the inauguration of the expansion.
Frank Nieto can be reached at fnieto@hartenergy.com.
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