Canal Solidified as Key LNG Trade Link

The recent transit of the LNG Sakura, a Neopanamax class tanker, through the Panama Canal carrying the first cargo of LNG to Japan from the Dominion Cove Point terminal in Maryland, has solidified the canal’s strategic importance to the global LNG trade, its administrator said April 30.

The transit, which occurred the weekend of April 28-29, marked the beginning of a new commercial route for LNG between the US and Asia, the Panama Canal Authority (PCA) said in a statement.

Dominion Cove Point has two main clients: ST Cove Point, a consortium consisting of Sumitomo and Tokyo Gas, and Gail Global LNG, a subsidiary of India’s GAIL. The LNG Sakura, which left Cove Point on April 22, is carrying the first shipment of the 0.8mn metric tons/year (mt/yr) of LNG contracted by the Japanese energy company Kansai Electric, which is also the majority owner (70%) of the tanker; the other 30% is owned by Japan’s NYK Line.

The Panama Canal currently provides seven booking slots per week to LNG shippers, who are currently averaging just 5.5 transits per week. But the canal has already proved it can handle increased traffic: on April 27, for example, three LNG tankers transited the Canal from the Pacific side to the Atlantic side in one day, a first for the facility.

This year, the PCA said, the Canal’s LNG traffic is expected to grow by 50% compared to 2017, with 244 transits expected, up from 163 in 2017.

“As the global demand for LNG continues to grow, the Panama Canal remains committed to offering an efficient and safe transit that will benefit its customers, reducing travel times and unlocking new opportunities for world trade,” it said.

[Banner photo of LNG Sakura courtesy OCEANBREEZE]