Merchant groups warned that the congestion problem that the Panama Canal presents , and that has generated delays in the shipments of liquefied natural gas (LNG) , through the Central American passage could last until the winter months, period where the greatest demand.
According to Reuters reports, despite the fact that the Panama Canal Authority (ACP) has stated that changes were made in speed and traffic on the road, the price of LNG and shipping rates have reached record levels due to this true “neck bottle ‘ , where high demand from Asia, and freezing weather have put the power supply system under pressure.
What’s more, ships carrying LNG from the US to meet Asian demand waited up to two weeks. In this regard, ACP announced that the service was reduced by half. “We changed the transit reservation system on January 4 to reduce congestion and allow LNG vessels to reserve two spaces between 80 and 15 days before transit , instead of just one. We have also introduced auctions to sell any space that is available within two to three days before transit due to last minute cancellations, “they told Reuters.
The analysts said they still expect congestion until March , when temperatures in the northern hemisphere rise and decrease demand for heating due to shortage of space.
Ross Wyeno , America’s Lead LNG Analyst at S&P Global Platts , commented that “Currently, there are only two avenues available for LNG. Ideally, it would take much more than that. Traders LNG canceled some tenders due to delays, but there are too many vessels for the three sets of locks that raise and lower vessels that carry all kinds of products through the channel “ .
For his part, Schreiner Parker , vice president for Latin America at Rystad Energy , said that “ high spot prices in Asia are creating a morning rush hour scenario for US LNG producers , with loads moving in the same address at the same time. The rise in prices and demand is the culmination of a deeper trend, as China, India and other Asian nations have bought LNG as part of efforts to diversify from highly polluting coal .
Given this contingency, over the past nine months, LNG spot prices have multiplied by more than tenfold from an all-time low in April of US $ 2 per million British thermal units (mmBtu) to more than US $ 28 per mmBtu . This is because a trip to Asia through the Panama Canal lasts 15 days.
As an alternative to this problem, US exporters to meet the high demand, are considering shipping shipments through the Cape of Good Hope in South Africa . However, this route doubles the travel time to Asia by about 38 days .