Marianna Parraga, Elida Moreno, and Curtis Williams of Reuters report that Panama now offers two transit slots per day for LNG ships, but a long-term reservation system starting in January will allow producers to reserve slots up to a year in advance. They write:
The Panama Canal aims to regain vessel traffic carrying U.S. liquefied natural gas to Asia as demand in that market rises and a new reservation system allows shippers to lock in slots, following a 65% decline in the transit of its second-most important segment, the Panama Canal Authority told Reuters.
A U.S. LNG switch to Europe in the aftermath of Russia’s invasion of Ukraine, combined with long waiting times and expensive fees to transit through Panama due to severe drought, have kept many LNG ships out of the canal.
Many gas exporters continue to take longer routes around South America even after the waterway’s authority lifted the restrictions this year. The canal is the shortest route to Asia for U.S. gas exporters, whose sales to Japan, China, South Korea and India have grown substantially in the last decade. […]
A new reservation system and lower costs allowed the canal’s net income to rise 9.5% to $3.45 billion in the fiscal year that ended in September, despite the drought.
But commodities producers believe the canal’s administration still has room to arrange more transits of LNG and liquefied petroleum gas (LPG) vessels. The parties have been in touch since last year to consider proposals.
Panama now offers two transit slots per day for LNG ships, but a long-term reservation system starting in January will allow producers to reserve slots up to a year in advance. […]“It (the canal) still has some constraints that we are working through, like the fact that LNG carriers do not have night-time transit capabilities through the new locks,” Feygin said.
The canal, which is monitoring the expansion of global LNG fleets and the status of new U.S. LNG projects, expects that larger LNG vessels, including floating storage units that feed LNG to onshore facilities, will be passing through Panama’s largest locks in the next 18 months.
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