Panama Canal plans LNG carrier tariff hike
The Panama Canal Authority (ACP) has proposed a simplification of its LNG carrier tariffs that is set to lift transit costs and favour larger ships.
The authority has proposed a toll simplification that could come into force in 2023. The proposed new tariff structure for LNG carriers includes a single capacity-based rate for their entire capacity — lower than the current rates — as well as a fixed fee. The rate and the fixed fee change, depending on whether the vessel is a regular, super or neopanamax ship, although almost all LNG carriers only use the neopanamax locks. The roundtrip return ballast rate will also be removed under the proposed adjustment, while the normal ballast rate will be 90pc of the laden rate.
The ACP has historically based its LNG carrier transit tariffs on vessel capacity echelons, with one rate for the first 60,000m³ of capacity and incrementally lower rates for the next two 30,000m³ of capacity. The authority then applied a flat tariff in $/m³ for capacity exceeding the 120,000m³ threshold. The authority also applied a 10pc discount to empty carriers, and an even wider discount if the empty carriers were returning by the waterway having already transited while laden (see existing tariff structure table).
The proposed changes would increase the total cost for a 160,000m³ laden carrier in 2023 using the neopanamax locks to around $516,000, from $442,600 under the current tariff regime, and the cost for a similar-sized empty carrier to $464,400 from $391,700 under the non-roundtrip ballast tariff. The charge for a laden 174,000m³ carrier would increase to $534,900 from $476,760 — or to $481,410 from $421,800 if the same vessel were transiting empty. The 2023 tariff is also set to rise further under the proposed adjustment (see proposed new tariff table).
There is already a slim tariff-based incentive for charterers to use larger vessels to transport LNG via the canal. Under the current tariff, a 174,000m³ carrier — representative in size for most of the newer LNG ships — could face a charge for laden transit of around $2.74/m³, compared with $2.76/m³ for a 160,000m³ vessel, which would be closer to the global fleet average. Under the proposed adjustment, the larger laden tanker in 2023 would have a charge of $3.07/m³ while the smaller vessel would have a cost of $3.23/m³, widening this incentive to utilise vessels with larger capacities.
A public hearing on the proposal, as well as proposed adjustments affecting other shipping segments, will be held on 20 May, with the ACP also considering correspondence received by 17 May.
| Proposed new LNG tariff | |||
| Effective 2023 | Effective 2024 | Effective 2025 | |
| Tariff structure | |||
| Capacity rate ($/m³) | 1.35 | 1.70 | 2.05 |
| Fixed fee ($) | 300,000 | 300,000 | 300,000 |
| Total cost laden ($) | |||
| 160,000m³ carrier | 516,000 | 572,000 | 628,000 |
| 174,000m³ carrier | 534,900 | 595,800 | 656,700 |
| Total cost ballast ($) | |||
| 160,000m³ carrier | 464,400 | 514,800 | 565,200 |
| 174,000m³ carrier | 481,410 | 536,220 | 591,030 |
| — Panama Canal Authority | |||
| Roundtrip ballast rate will be eliminated under proposed adjustment. | |||
| Existing LNG tariff structure (effective 1 Jan 2020) | |||
| Laden | Ballast | Roundtrip ballast | |
| Tariff ($/m³ capacity) | |||
| First 60,000m³ | 3.12 | 2.79 | 2.48 |
| Next 30,000m³ | 2.68 | 2.35 | 2.17 |
| Next 30,000m³ | 2.58 | 2.26 | 1.99 |
| Remaining capacity | 2.44 | 2.15 | 1.87 |
| Total cost ($) | |||
| 160,000m³ carrier | 442,600 | 391,700 | 348,400 |
| 174,000m³ carrier | 476,760 | 421,800 | 374,580 |
| — Panama Canal Authority | |||
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