The Panama Canal set a new monthly record for transits and
tonnage of liquefied natural gas (LNG) vessels in January, in part due to the
recent surge in the energy market. Strong demand for LNG shipments from Asia
was driving the record shipments and also contributing to prolonged delays for
gas carriers to transit the canal.
According to data released from the Panama Canal Authority,
a total of 58 LNG vessels transited through the Neopanamax Locks, totaling 6.74
million Panama Canal tons during January. The previous monthly records were set
in January 2020 with 54 transits and in November 2020 with 6.23 million PC/UMS.
"These achievements reaffirm the Canal's ability to
adapt and guarantee our competitiveness and reliability to capture the
opportunities presented by market changes, including the liquefied natural gas
segment," said Panama Canal Administrator, Ricaurte Vásquez Morales.
At the end of 2020, delays at the Panama Canal was
contributing to LNG supply constraints just as demand was increasing from Asia.
Analysts cited the delays at the canal as one of the key factors contributing
to the record high prices for the gas.
The Panama Canal responded to the reports of waits for
transits lasting up to two weeks by implemented adjustments in its processes
for obtaining transit slots. The goal was to provide additional opportunities
for the LNG carriers to reduce the prolonged waiting times. In January, they
added a second slot to the advance reservation system and also modified the
Transit Reservation Booking System, allowing any slot that becomes available
for Neopanamax vessels within 96 hours of a transit to be offered through an
auction process.
Since the modifications, the canal reports it has conducted
25 auctions, of which nine have been awarded to LNG vessels. The canal was able
to transit three northbound LNG vessels in one day, on January 25, and four LNG
ships, two northbound and two southbound, in one day on January 31.
The actions helped to reduce the waiting time cutting it in
half for some vessels to one week. However, the research firm Energy Aspects
told Reuters that around one-third of LNG vessels loading from the United States
in December opted to take a long route around Africa and across the Indian
Ocean. Some analysts were suggesting that ships might opt for the Suez Canal as
an alternative route, but they did not expect the backlog to ease until spring
when demand for LNG shipments is expected to return to historical levels.