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

Contracts

Diana Extends Containership Time Charters

Diana Containerships Inc. announced direct continuation of time charter agreements for m/v Cap Domingo and m/v Cap Doukato   Diana Containerships Inc., a global

BMT Supports Samalaju Port Development

BMT subsidiaries in the Asia-Pacific region have been awarded a contract to provide design expertise for an advanced bulk-material handling system for the emerging port of Samalaju in East Malaysia.

EU: Ships Will Measure CO2 Emissions

Shippers to begin monitoring from 2018; Environmental groups say law is weak, shippers favorable. The shipping sector will for the first time have to monitor

Tanker Trends

MHI Completes Development of "Sayaringo STaGE"

Mitsubishi Heavy Industries, Ltd. (MHI) has completed development of the "Sayaringo STaGE," a next-generation LNG (liquefied natural gas) carrier. The Sayaringo

New Company Takes Over OW Tanker

OW Tanker, a unit of bankrupt OW Bunker and owner of its marine fuel supply ships, has been taken over by a newly-created company, the fleet manager told Reuters on Wednesday.

Stena Bulk Joins World Ocean Council

Stena Bulk reports it is the first Swedish shipping company to join the World Ocean Council (WOC), a global organization that converges a diverse range of maritime

Finance

New Company Takes Over OW Tanker

OW Tanker, a unit of bankrupt OW Bunker and owner of its marine fuel supply ships, has been taken over by a newly-created company, the fleet manager told Reuters on Wednesday.

WRRDA: Clearing the Channel for P3 Projects

A Creative Combination for Financing Inland Waterways Infrastructure Earlier this year, the U.S. maritime industry in general, and the inland waterways industry in particular,

Choosing the Best Financing Proposal

It isn’t always about the rate. In a robust boatbuilding market – like the one we see now – even the most successful, financially stable operators need to borrow.

LNG

World’s First LNG-Ready Ultra Large Container Ship Named

The race is on in global maritime circles to be the “world’s first” in every aspect of environmental friendliness, particularly in regards to the incorporation of LNG as fuel onboard commercial ships.

ClassNK Approves Niigata Dual-fuel Engine Design

Classification society ClassNK has granted approval to the design of the new 28AHX-DF dual-fuel engine developed by Niigata Power Systems Co., Ltd. The new engine

Massive LNG Absorber Shipped to Malaysia

Successful transport of 1,480t absorber for biggest LNG plant worldwide in Malaysia.   1,480 tons and a high center of gravity made the transport of an absorber

Logistics

Gazprom to Partner Turkey to Supply Gas

Moscow hosted today a working meeting between Alexey Miller, Chairman of the Gazprom Management Committee and Taner Yildiz, Minister of Energy and Natural Resources of the Republic of Turkey.

Fednav Celebrates Anniversary Trio in Cleveland

Fednav Limited held a reception on board one of its vessels, the Federal Mayumi, at the Port of Cleveland yesterday to celebrate a trio of anniversaries: the 70th

Night Moves on America's Waterways

Overnight operations are certainly not unusual on America’s inland waterways, but that doesn’t make them any less hazardous. Onboard activities that seem so straightforward

 
 
Maritime Standards Naval Architecture Offshore Oil Pipelines Pod Propulsion Port Authority Ship Electronics 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: 0.1940 sec (5 req/sec)