Panama Canal Expansion to Transform the Gas Carrier Game

MarineLink.com
Friday, December 27, 2013
LNG carrier photo CCL

Nearly 90% of the LNG fleet will be able to transit the expanded Panam canal after it comes on line towards the end of 2015, compared to just 7% today, according to Poten's recent monthly report 'LNG in World Markets'.

Although the timing fits perfectly with the liquefaction projects under construction or proposed on the US Gulf Coast and along the eastern seaboard, the idea that LNG vessels would be transiting the canal was not on any radar screen when the expansion was first conceived. Imports of LNG into the US actually peaked in 2007 at 16 MMt, largely sourced from exporters in the Atlantic basin with no need for the canal.

The major impetus behind the expansion was to attract larger container vessels, allowing Panama to compete with rival offerings from the Suez Canal. Now, however, the 48-mile artery connecting the Atlantic and Pacific oceans promises to become an inter-basin route for US export projects.

The new locks will be 55 meters wide, representing a significant increase from the existing dimensions of 32.4 meters. This aspect of the expansion is what has gained the most attention from the LNG industry, as the canal’s current beam restrictions prevent all but a handful of older 18,000- 50,000 m3 vessels from transiting the waterway. Once complete, the expansion will allow ships with a length overall of 366 meters, a beam of 49 meters and a draft of 15.2 meters. Only the Qclass vessels in Qatar’s fleet will still be too wide to transit the canal after it is expanded, explains Poten.

Benefits to Gas Carriers of using Panama Canal
While tolling fees are expected to be finalized in the first half of next year, under the current structure a 173,000 m3 membrane vessel would pay $382,440 for the laden voyage while the ballast leg would cost $301,500. This equates to a charge of around 18 cent/MMBtu for transiting the canal. It is also nearly 20% less than the roundtrip through Suez, which costs some $830,000 for a similar sized vessel.

The trip from the US Gulf Coast to Japan and back through Panama will take around 49 days, shaving 26 days off the roundtrip voyage compared to going through Suez. A special ballast rate will be offered for shippers that decide to do a roundtrip, although this will require use of the same vessel on both legs and the ballast transit must be completed within 60 days of the laden passage.

Some Moss LNG carriers still too big
However, a number of existing Moss ships will be too wide to transit the Panama Canal even after expansion. Many of the 145,000 m3 to 148,000 m3 Moss vessels have beams just over 49 meters. Forward visibility could also be a problem for some Moss ships. Although it is unlikely that any vessel that fits the LOA, beam and draft specifications will be refused passage, extra costs may be incurred for additional escort tugs and pilots if visibility is an issue.

Poten's Monthly LNG Report adds that the authority has not concluded if liquid petroleum gas ships will be in the same category as LNG. Only a half dozen or so Very Large Gas Carriers can transit the canal now, but this will change with the expansion. With LPG production rising in the US, exports are expected to ramp up sharply, and citing expert sources, Poten's add that once the canal is expanded, there will be a lot more LPG exports going out of the US Gulf Coast to the Far East.

The report in greater detail can be found at: http://www.poten.com/Document.aspx?id=25340&filename=Panama%20Canal%20Prepares%20For%20Expansion%20In%202015.pdf

Source: Poten's Monthly Report on LNG in World Markets

 

 

Maritime Reporter November 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

Wärtsilä to Begin Building LNG Terminal in January

Wärtsilä has been given full notice to proceed (NTP) from Manga LNG Oy for the supply of a liquefied natural gas (LNG) import terminal in Tornio, Northern Finland.

Polarcus Awarded 3D Project Off West Africa

Polarcus Limited has signed a letter of intent with Perenco Oil & Gas Gabon S.A. for a 3D marine seismic acquisition project offshore West Africa.   The project,

Boskalis, VolkerWessels Win Offshore Wind Farm Work

Royal Boskalis Westminster N.V., in partnership with Volker Stevin International (VolkerWessels), has been awarded a contract by Iberdrola Renewables Offshore Deutschland

Tanker Trends

Benghazi Port Still Closed, Imports Rerouted

The commercial port in Libya's second city, Benghazi, remains closed due to fighting between pro-government and Islamist forces, forcing wheat imports to make a detour via Tobruk harbour,

EGAS Tenders for as many as 48 LNG Cargoes

Egypt's state-owned gas company EGAS has tendered to buy at least 48 cargoes of liquefied natural gas (LNG) for delivery in 2015/16, three traders said. A senior

Teekay Tankers to Acquire 5 Tankers

Teekay Tankers Ltd. announced that it will acquire four coated Aframax tankers and one uncoated Aframax tanker for an aggregate purchase price of approximately $230 million.

Finance

DSG Marine Asks Shipowners to Consider Fixed Premium P&I Cover

P&I Insurance Seminar for Owners and Charterers held in Mumbai DGS Marine, a global P&I management provider and exclusive manager for the British European and Overseas (BE&O) P&I Facility,

Liquefaction Terminals to Dominate LNG Capital Expenditure

Capital expenditure (Capex) on global LNG facilities is expected to total $259 billion (bn) over the period 2015-2019, with investments expected to be 88% larger

EGAS Tenders for as many as 48 LNG Cargoes

Egypt's state-owned gas company EGAS has tendered to buy at least 48 cargoes of liquefied natural gas (LNG) for delivery in 2015/16, three traders said. A senior

LNG

Liquefaction Terminals to Dominate LNG Capital Expenditure

Capital expenditure (Capex) on global LNG facilities is expected to total $259 billion (bn) over the period 2015-2019, with investments expected to be 88% larger

Wärtsilä to Begin Building LNG Terminal in January

Wärtsilä has been given full notice to proceed (NTP) from Manga LNG Oy for the supply of a liquefied natural gas (LNG) import terminal in Tornio, Northern Finland.

EGAS Tenders for as many as 48 LNG Cargoes

Egypt's state-owned gas company EGAS has tendered to buy at least 48 cargoes of liquefied natural gas (LNG) for delivery in 2015/16, three traders said. A senior

Logistics

Benghazi Port Still Closed, Imports Rerouted

The commercial port in Libya's second city, Benghazi, remains closed due to fighting between pro-government and Islamist forces, forcing wheat imports to make a detour via Tobruk harbour,

EGAS Tenders for as many as 48 LNG Cargoes

Egypt's state-owned gas company EGAS has tendered to buy at least 48 cargoes of liquefied natural gas (LNG) for delivery in 2015/16, three traders said. A senior

Nordic Yards Delivers 'Wind Server'

Nordic Yards officially handed over the offshore service vessel to the Danish company DBB Jack-Up Services A/S. During the handover ceremony, the ship was named ‘WIND SERVER’.

 
 
Maritime Careers / Shipboard Positions Maritime Security Navigation Offshore Oil Pod Propulsion Port Authority Ship Repair Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2532 sec (4 req/sec)