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LNG/LPG Tanker Ship Traffic Increasing Through the Panama Canal

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June 3, 2016 2:00 am JST

Japan LPG carrier to be first to sail expanded Panama Canal

TOKYO -- The first vessel to cross the newly widened Panama Canal will be a Nippon Yusen tanker carrying liquefied petroleum gas.

Ships as big as this gas carrier -- capacity 46,000 tons -- traveled from the U.S. East Coast to Japan by sailing around the Cape of Good Hope. Taking the Panama Canal, which has been expanded to accommodate larger vessels, will shorten that roughly 45-day voyage to 22-30 days.

Nippon Yusen, one of the canal's top users, will have the honor of sailing first through the man-made wonder on June 27. A ceremony the day before will mark the completion of work to increase the maximum allowed width of vessels transiting the canal from 32 meters to 49 meters.

The tanker will deliver LPG to the Tokyo area for Idemitsu Kosan affiliate Astomos Energy.

LPG is an important fuel for Japan in the form of propane, used by roughly half of households for cooking and heating water. The country imports 70% of its LPG from the Middle East. The canal expansion may let Japanese imports of American LPG rise from 20% to about 30%, analysts say.

The expansion "will help diversify our procurement sources," Astomos Energy said.

It also could herald a breakthrough for shipping liquefied natural gas. Japan is looking to the U.S. for supplies of LNG, which has been in greater demand as power plant fuel here since the Fukushima Daiichi nuclear disaster. 

http://asia.nikkei.com/Business/Companies/Japan-LPG-carrier-to-be-first-to-sail-expanded-Panama-Canal

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July 5, 2016 7:00 pm JST

Expanded Panama Canal a boon for fuel-hungry Japan

AKANE TAMURA, Nikkei staff writer

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This Nippon Yusen ship was the first to pass through when the expanded Panama Canal opened for business on June 27.

TOKYO -- The recent expansion of the Panama Canal -- which vastly reduces the time needed for U.S. shipments of liquefied petroleum gas to reach Japan -- is expected to accelerate Japan's efforts to wean itself off its reliance on Middle Eastern LPG for a more diversified, stable supply. 

On June 27, when the expanded canal went into commercial operation, a Japanese vessel was the first to pass through the waterway. The Nippon Yusen VLGC, or very large gas carrier, was transporting LPG for Tokyo-based Astomos Energy, an affiliate of major Japanese oil refiner Idemitsu Kosan.

The ship is scheduled to arrive at a terminal in the Keihin district along the western coast of Tokyo Bay by the end of July.

LPG is a key source of energy for Japan, where about half of the households use propane -- produced from LPG -- for heating purposes.

The canal expansion will significantly shorten the time it takes to transport LPG from U.S. production bases on the Atlantic side. According to some estimates, the share of U.S. shipments in Japan's LPG imports will increase to over 30% from about 20% currently. The expansion is also expected to help Japan diversify its sources of the fuel, contributing to the country's goal of securing a more stable energy supply.

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In a speech at the opening ceremony on June 26, Panamanian President Juan Carlos Varela said the expansion is significant not only for Panama but also for the world.

That is certainly the case for Japan.

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The main reason is that the expansion allows passage of VLGCs, which can carry huge amounts of LPG in their 36-meter-wide hulls.

Large ships delivering U.S. LPG to Japan have long had to make a circuitous trip around the southern tip of Africa, a journey that can take as long as 45 days. But with the canal expansion, the journey is vastly shortened to just 22 to 30 days.

July 5, 2016 7:00 pm JST

Expanded Panama Canal a boon for fuel-hungry Japan

AKANE TAMURA, Nikkei staff writer

The new route is likely to bring big changes to Japan's energy industry.

For starters, it is expected to boost the share of U.S. LPG in Japan's imports, which have long been dominated by shipments from the Middle East, especially Saudi Arabia.

In the fiscal year ended March 2008, 91% of Japanese LPG imports were from the Middle East. By fiscal 2015, however, that ratio had shrunk to 62%, mainly due to the emerging "shale revolution" in the U.S. The global share of U.S. LPG -- a shale-oil byproduct -- rose to 25% in 2015.

Slightly over 20% of Japan's LPG imports were from the U.S. in fiscal 2015, and that figure is expected to continue rising, supported in part by the Panama Canal expansion.

Prices are another area where the canal revamp is expected to impact Japan's energy industry.

The prices that Japan pays for LPG are based on the so-called contract price issued each month to customers by the state-run Saudi Arabian Oil Co. (Aramco).

The contract price is set based on crude oil prices and the current LPG supply-demand balance. It tends to be higher in winter when the gas is in greater demand for heating purposes. In recent years, the price has been increasingly impacted by export prices of LPG produced in areas outside the Middle East.

When prices of Japanese imports of crude and LPG are compared on a yen-per-unit-of-energy basis, it is clear that in setting the contract price, Saudi Arabia is factoring in demand for exports from other oil producers.

For example, the average LPG contract price between November 2007 and February 2008 was 1,804 yen ($17.68) per kilojoule of the fuel, 187 yen higher than the comparable average crude price of 1,617 yen for the same period. But the average LPG price for November 2014 to February 2015 was 1,458 yen, only 105 yen more than the average crude price of 1,353 yen during the same period. Competition with U.S. shipments appears to have made the gap narrower.

"The growing share of U.S. products prompted Aramco to consider their prices when setting the contract price," said an Astomos Energy official. "Now that it's easier for U.S. products to reach key Asian markets, you can expect price pressure on the contract price to increase."

The Japan LP Gas Association plans to diversify its LPG sources to help ensure more stable energy supply for the country, said association Chairman Osamu Masuda on June 15 shortly before stepping down.

"We want to expand supply sources to more areas, such as Australia, Africa and Canada," Masuda said.

http://asia.nikkei.com/Markets/Commodities/Expanded-Panama-Canal-a-boon-for-fuel-hungry-Japan

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Marine News

LPG, LNG tankers take advantage of expanded Panama Canal

Houston (Platts)--9Jan2018/638 pm EST/2338 GMT

With 2017 marking the first full year since the $5 billion expansion of the Panama Canal, shipments of liquefied petroleum gas and liquefied natural gas combined marked one of the largest uses of the recently enhanced waterway, Ambassador Juan B. Sosa, consul of Panama, said Tuesday.

The transport of cargoes of LPG and LNG, largely from ports along the US Gulf Coast to markets in Asia, has had a "tremendous impact" on the total volume of cargoes transiting through the canal in the past year, Sosa said, speaking at a joint meeting of the American Petroleum Institute and American Association of Drilling Engineers in Houston.

The number of transits by LPG tankers almost doubled from 449 in fiscal year 2016 to 876 in fiscal year 2017, while the number of transits by LNG tankers jumped to 163 from 17 in the year-ago period, according to data from the Panama Canal Authority.

Together, there were 1,039 transits of LPG and LNG in fiscal year 2017, placing the combined total fourth in the number of transits, behind containerized cargo ships at 2,493 transits; dry-bulk vessels at 2,915 transits; and chemical tankers at 1,959 transits in the same period.
 

Sosa said the increased traffic in petroleum-related products is a direct result of the expansion of the canal, which was completed in June 2016 and which allowed the locks of the canal to accommodate the much larger tankers that have become the international standard for shipments of LPG, LNG and other petroleum products.

Prior to the expansion, the canal could only accommodate Panamax vessels of up to about 80,000 dwt and a draft of less than 39.5 feet.

However, with the widening of the locks and other improvements, the canal can now accommodate the Aframax class of vessels, which can carry 120,000 dwt and make up about 80% of the global LNG fleet.

One result of the expansion has been to increase the volume of trade for ports along the Gulf Coast, particularly the Texas coast, as a result of the region's importance as a hub for the petrochemical and LNG export industries.

He included in the greater Texas coastal region Sabine Pass, just over the Texas-Louisiana border and home to Cheniere Energy's LNG export terminal, currently the only LNG exporting facility in the Lower 48 states.

"The location of Houston is a tremendous asset," Sosa said, noting that Texas is Panama's No. 1 trading partner.

Not only does the Texas coast offer access to the Port of Houston and the Houston Ship Channel, but the greater coastal region also boasts several other deepwater ports, such as Freeport and Corpus Christi, which can accommodate the larger vessels now able to transit through the canal, he said.

"No state has more deepwater ports than Texas," Sosa said.

As evidence of the expected growth in the region's international trade, he pointed to an ExxonMobil announcement last spring that the integrated oil and gas company planned to invest $20 billion in building up its petrochemical operations in the Gulf Coast region.

The bulk of that investment is expected to be put toward ramping up the export of US-sourced petrochemicals to Asia via the canal, he said.

"This also opens the door for the ports of Freeport, Port Arthur and Sabine Pass," Sosa said.

The Panama Canal forms a hub of global maritime trade, with 144 trade routes traveling through the waterway, serving some 1,700 ports worldwide, including 85 direct destinations in Europe and the Americas, Sosa said.

The US is by far the most active user of the canal, accounting for about 68% of transits. China is a distant second, accounting for 18% of all canal business.

--Jim Magill, jim.magill@spglobal.com
--Edited by Annie Siebert, ann.siebert@spglobal.com

 

https://www.platts.com/ShippingNews/21010501

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Panama Canal LNG traffic builds towards capacity

Thu 15 Feb 2018 by Mike Corkhill

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Potential LNG carrier transits of the Panama Canal are set to mushroom

The Panama Canal’s new enlarged locks handled 60 LNG carrier transits in the last quarter of 2017, a 40% jump on the same period a year earlier. The climb in traffic levels aligns with the build-up in exports from the Sabine Pass terminal in Louisiana, currently the LNG sector’s only user of the Canal for laden voyages.

Cheniere Energy’s Sabine Pass terminal exported 13.1M tonnes of LNG in 2017, up from 3.1M tonnes a year earlier. The facility’s third and fourth 4.5 million tonnes per annum (mta) liquefaction trains commenced operations during 2017 while a fifth is under construction and on target for a June 2019 completion.

Some 43% of the Sabine Pass output in 2017 was dispatched to customers in Asia. The Panama Canal did not accommodate all the Asian shipments leaving Sabine Pass as a handful of the loaded LNGCs departing the terminal sailed eastbound and made their passage via the Cape of Good Hope. 

However, the waterway also hosted Sabine Pass cargoes destined for the Pacific coast of the Americas, namely the Mejillones and Quintero import terminals in Chile and the Manzanillo facility in Mexico.

The 60 LNGC transits of the Canal in Q4 2017 equates to 4.6 passages per week. The Panama Canal Authority (ACP) currently permits one LNGC through the waterway per day, and the current traffic for this type of gas ship is steadily building towards that threshold.

The question arises as to what extent ACP is prepared to amend its LNGC transit policy as US exports of the cryogenic liquid climb rapidly over the next three years.

Although the ACP recently stated that it expects the volume of LNGC transits it handles to rise another 50% by September 2018, the commissioning of 11 further liquefaction trains currently under construction will boost US LNG export potential by 2020 to 65 mta, or five times the 2017 trade volume. At least three of the new trains, with an aggregate output capability of 12.5 mta, are due onstream this year.

A sizeable proportion of the additional US LNG output in the years ahead is likely to be sold in Asia where customers will appreciate the reduced shipping costs offered by a Panama Canal transit. Will the waterway be up to the challenge of handling what might well turn out to be a fivefold jump in LNGC traffic?

 

http://www.lngworldshipping.com/news/view,panama-canal-lng-traffic-builds-towards-capacity_50818.htm

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New canal benchmark:  3 LNG Tankers cross on same day

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New transit high
Post Views: 158
 
Three LNG tankers sailed through the Panama Canal on the same day this week, marking a first for the newly expanded waterway and highlighting the booming global gas trade.

Three liquefied natural gas (LNG) tankers transited the Panama Canal on the same day earlier this week, a new benchmark although there have been over dozen days when two of the specialized vessel have passed through the newly expanded locks, built to accommodate giant postpanamax vessels.

All three ships — Gaslog Hong Kong, Gaslog Gibraltar, and Clean Ocean — entered the canal on a staggered basis from the Pacific side on Tuesday and had completed their crossings by early Wednesday, according to Bloomberg and confirmed by  The Canal Authority(ACP).

The crossings underscore how the LNG trade has surged worldwide as new export facilities from the U.S. to Australia rumble to life and buyers in Asia boost their demand for the fuel says, Bloomberg.

The canal completed a $5 billion expansion almost two years ago, and  US  traders and terminal developers have been closely watching the authority’s ability to accommodate the jump in tanker traffic and increase confidence about the U.S.’s ability to place LNG in China if President Trump can rein in his ant-China rhetoric.

By March this year, 134 LNG carriers had passed the Panama Canal in the current fiscal year.

“As demand from the LNG segment continues to grow,” the canal is “taking the necessary steps to increase capacity commensurate with demand,” said an ACP statement.

 

http://www.newsroompanama.com/business/panama-4/new-benchmark-3-lng-tankers-cross-canal-on-same-day

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Natural Gas and the Panama Canal

In 2017, 6 million tons of natural gas passed through the interoceanic route, and by 2020 this figure could rise to 30 million tons.

Thursday, April 26, 2018

Explained by an increase in supply in the US deposits and of reserves in Australia, the Panama Canal Authority estimates that in the next three years natural gas traffic could grow fivefold compared to the amount reported in 2017.

In relation to the current situation and what is expected, Jorge Quijano, administrator of the Panama Canal Authority, told Prensa.com that " ... 'Right now, on average, we are handling six vessels [with LNG] per week, but in the very near future there will be several plants exporting and that starts to add up'."

See also: "New opportunity for $900 million gas plant"

The article adds that " ... shipments are expected to increase in the next few years and there are several US LNG projects under construction, with a total planned US capacity of almost 70 million tons per year, compared to 18 million tons in 2017."

 

https://www.centralamericadata.com/en/article/main/Natural_Gas_and_the_Panama_Canal

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Increased US liquid gas transits through Panama Canal

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Posted 19/07/2019

The passage of vessels carrying liquefied natural gas (LNG) through the  Panama Canal continues to rise. On Friday, July 18 Maria Energy traveled with the first shipment of LNG from the Cheniere plant in Corpus Christi, Texas, The plant that joins the three that already use the Panama Canal for the placement of the product in ports located on the Pacific. On July 13, Gaslog Sydney with LNG from Cameron, in Louisiana also moved through the expanded locks.

 

https://www.newsroompanama.com/business/increased-us-liquid-gas-transits-through-panama-canal-1

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