Suez Canal increases rebates for US LNG tankers

Egypt's Suez Canal Authority (SCA) has raised the rebate on transit fees for LNG vessels travelling between the US Gulf coast and some Asian ports.

LNG tankers travelling from the US Gulf to ports between India's Kochi terminal and Singapore will be able to claim a 50pc rebate, up from 40pc, while vessels heading to ports east of Singapore can claim a 75pc rebate, up from 65pc, the SCA said.

The new rates will come into force on 1 October and remain effective for a year. Rebates already in force for LNG tankers travelling from the US to other destinations remain unchanged.

The rebate applies to loading facilities west of Miami, which do not include vessels loading at the 5.8mn t/yr Cove Point facility.

LNG vessels can claim the rebate provided they do not call at any other port for commercial reasons during their journey. They would also not able to claim other rebates offered by the SCA, which are subject to an annual tonnage. These rebates were reduced in February, with the SCA now offering a 7pc rebate on vessels carrying 3mn-5mn t/yr, down from 10pc, and a 10pc rebate on vessels carrying more than 5mn t/yr, down from 15pc. The 5pc rebate on vessels carrying 1mn-3mn t/yr through the channel remains unchanged.

Higher rebates could provide scope for increased competition between the Suez route and the Panama route for LNG vessels travelling between the US Gulf and northeast Asia. But this might apply more to firms with ample shipping capacity than those seeking to make spot charters.

But US cargoes sold to northeast Asian firms have continued to travel predominantly through the Panama Canal in recent months, and opted for the route via the Cape of Good Hope in only some cases. No US Gulf Coast cargoes travelled to northeast Asia via Suez since October last year, vessel tracking data show.