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