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 January 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Contracts

U.S., India to Seal Nuclear Deal

The United States and India have reached a breakthrough on two issues holding up civil nuclear cooperation between them, U.S. President Barack Obama told a news conference in New Delhi on Sunday.

U.S. Refinery Workers' Contract Talks Moving Slowly

With just a week of bargaining left until the national contract for U.S. refinery workers expires, the United Steelworkers union (USW) said talks with oil company

MSC Sinfonia Upgradation at Fincantieri Shipyard

Extension operations on MSC Sinfonia, the second out of four MSC cruise ships to undergo the Renaissance Programme of enhancements, have begunin the past days at Fincantieri shipyard in Palermo.

Tanker Trends

Yamal LNG Inks Deal with Gazprom to Sell LNG in Asia

A trading subsidary of Russian gas producer Yamal LNG has signed a long-term supply contract with a trading subsidiary of Gazprom, under which liquefied natural

Maran Orders 4 LNGCs from DSME

Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) will build four large Liquefied Natural Gas Carriers (LNGC) for Maran Gas.   The four LNGCs

Tepco, Chubu Buying 6 LNG cargoes from Vitol

Japan's Tokyo Electric Power Co and Chubu Electric Power Co,, are expected to buy a total of six cargoes of liquefied natural gas (LNG) from Vitol and GDF Suez in their first joint tender,

Finance

India Not Pressurized by US-China Deal

Indian Prime Minister Narendra Modi said a climate deal between the United States and China does not put pressure on India, but that global warming itself was reason to take action.

U.S. Refinery Workers' Contract Talks Moving Slowly

With just a week of bargaining left until the national contract for U.S. refinery workers expires, the United Steelworkers union (USW) said talks with oil company

Obama, Modi Aim High on India Trip

In a fresh bid to make India an enduring strategic partner, U.S. President Barack Obama lands in New Delhi on Sunday for a highly symbolic parade and to nurture

LNG

Hofste, Montijn Nominated to Supervisory Board Fugro

Fugro N.V. announces that the Supervisory Board of Fugro nominates Mrs. P.H.M. Hofsté and Mrs. A.H. Montijn for appointment as members of the Supervisory Board

Venezuela's PDVSA Debt rose 6.3%

Venezuelan state oil company PDVSA's consolidated financial debt rose 6.3 percent in 2014 compared with the previous year to reach $46.2 billion, the company said late on Friday,

Yamal LNG Inks Deal with Gazprom to Sell LNG in Asia

A trading subsidary of Russian gas producer Yamal LNG has signed a long-term supply contract with a trading subsidiary of Gazprom, under which liquefied natural

Logistics

Hofste, Montijn Nominated to Supervisory Board Fugro

Fugro N.V. announces that the Supervisory Board of Fugro nominates Mrs. P.H.M. Hofsté and Mrs. A.H. Montijn for appointment as members of the Supervisory Board

Hiab Debuts Biggest Crane - HIAB X-HiPro 1058

Hiab, part of Cargotec, is set to launch the biggest crane to date in its high capacity range, the HIAB X-HiPro 1058. This signposts the first in a series of launches,

Technip Certified to EDGE Standard

Technip and EDGE Certified Foundation announce today that Technip in Brazil, in France and in Italy, including flexible pipe manufacturing plants in Brazil and France and Group’s headquarters,

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Navigation Port Authority Salvage Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
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: 0.3192 sec (3 req/sec)