Panama Canal prepares for fivefold increase in LNG carrier traffic
In the same week that the Panama Canal handled three LNG carrier transits in the same day for the first time, the waterway’s administration announced it is aiming for a fivefold increase in the volume of LNG it handles, to the 30 million tonnes per annum (mta) mark, by 2020. Approximately 6M tonnes moved through the Canal in 2017.
The three LNGCs that made Panama Canal history last week - Gaslog Hong Kong, Gaslog Gibraltar and Clean Ocean - entered the waterway in the ballast condition on a staggered basis from the Pacific side on Tuesday, 17 April and had completed their transits by early Wednesday.
Between July 2016, when the enlarged Canal locks were commissioned, and March 2018, the Panama Canal Authority (ACP) had handled 300 LNGC transits. In June 2017 the waterway accommodated two passages of such ships in the same day for the first time. This practice became routine in December in December 2017, as LNGC traffic ramped up to meet the burgeoning winter demand for gas in Asia.
The majority of the Panama Canal LNGC transits to date have been to meet the needs of Cheniere Energy’s Sabine Pass LNG liquefaction plant in Louisiana. Sabine Pass has four trains in operation and a fifth is under construction.
A second US export project, Cove Point in Maryland, has just commenced commercial operations and a further US East Coast export terminal, the Elba Island facility in Savannah, Georgia, is set to come on stream this summer.
Following that, in 2019, three more US Gulf liquefaction plants – Cameron LNG, Freeport LNG and Corpus Christi, are set to begin operations. All these new facilities are likely to be dispatching westbound cargoes, to Asia and the Pacific coast of the Americas, via the Panama Canal.
The LNG sector has presented scheduling challenges for ACP due to the difficulties associated with the timings of bookings. In contrast to the major container shipping lines, whose vessels are on strict rotations and the day of the anticipated passage can be pinpointed, LNGC operators point out that their vessel itineraries are subject to greater variability due to the increasingly flexible nature of the trade.
One set of challenges that ACP is facing as Canal traffic continues to build rapidly is the provision of sufficient escort tugs and tug crews. Two tugs attend each vessel transit of the new, large-size locks opened in 2016.
ACP is already looking beyond the anticipated build-up in traffic levels over the next few years. Consideration is being given to the construction of a further set of locks to serve a new generation of even bigger ships.