The pending completion of the Panama Canal’s expansion could be a success—but in the opposite direction than the canal authority expected when it announced the $5.25 billion project seven years ago. The goal in 2006 was to tap growing, eastbound containership trade from Asia to Atlantic ports.
Instead, a big jump in traffic may come from westbound liquefied natural gas (LNG) traffic moving from the Gulf Coast to Asia when the new locks open in 2015. Jorge Luís Quijano, the canal administrator, said in a recent interview that LNG, along with other energy-related cargoes and increasing commodity shipments, may prove to be the largest share of increased traffic through the waterway. He added the canal authority is reviewing the possibility of reducing tolls for vessels with energy cargoes, including LNG, propane and other liquefied gases, to boost traffic. Momentum’s Frank Tsuru speaks during Hart Energy’s recent Marcellus-Utica Midstream Conference in Pittsburgh.
The Panama Canal Authority says the waterway already handles 5% of the world’s trade. The new locks will allow the canal to handle ships as long as 1,200 feet, compared with the 965-foot limit for current “Panamax” vessels. Maximum draft will increase to 60 feet from 42 feet.