Panama Canal LNG transit waiting times shorten

The average waiting time for vessels without a booked transit slot to cross the Panama Canal's Panamax locks has dropped to three days, having averaged six days in recent weeks. But vessels are still waiting around six days to cross the Neopanamax locks.

Fog at the Panama Canal delayed daily transits in late October, and recent hurricanes affecting US Gulf coast crude and LNG export terminals meant that shipments arrived simultaneously at the waterway. This caused further backlogs, a spokesperson for the Panama Canal Authority told Argus.

The canal has increased daily transits to 36 from around 30 in the preceding months, when demand for crossings was lower as a result of weaker global oil demand and a fall in US LNG exports as offtakers opted to turn down their contractual volumes. Of these 36, only around 11 are not pre-booked, which can cause delays when prompt transit demand rises.

Neopanamax delays

LNG carriers — classed as Neopanamax by the Panama Canal — continue to face ample delays at the waterway, with four laden vessels at present holding offshore and awaiting transit, while the 177,300m³ Shinshu Maru was passing through today.

The last laden vessel to cross the canal, the 174,000m³ Gaslog Hong Kong, waited around four days before crossing.

Last month, 35 empty and laden LNG carriers transited the canal, down from 39 a year earlier. But five had waits of longer than eight days. The canal offers two bookable slots a day for LNG carriers, but can accommodate up to two more LNG transits each day on a non-bookable basis.

A recent increase in northeast Asian LNG demand has drawn Atlantic basin supply to the Pacific and away from demand regions such as Europe. This has further buoyed demand for transit via the Panama Canal, particularly for cargoes loaded at US liquefaction facilities, although a number of firms appear to have opted to deliver US LNG via the Cape of Good Hope and Malacca strait instead. These firms may not have had pre-booked transit at the waterway, opting to deliver through other routes to avoid waiting for passage through the Panama Canal.

Delays at the canal in late October further tightened vessel availability in the LNG freight market, with demand for Atlantic-Pacific journeys already weighing on availability as firms attempted to secure vessels to deliver to northeast Asian markets.

US LNG production at nameplate capacity — around 74.8mn t/yr — is equivalent to around 1,035 standard-sized cargoes a year. Assuming one bookable and one non-bookable Atlantic-Pacific transits per day at the canal, around 70pc of these cargoes could be delivered to Pacific destinations through the canal. But these cargoes would also have to compete with exports from Trinidad and Tobago, which often transit the canal.

By Samuel Good