Unladen carriers drive Panama Canal LNG transit rise

Rising Panama Canal LNG transits are being driven by unladen carriers returning from deliveries in Asia, while loaded shipments from the US to Asia have held steady so far, S&P Global Commodities at Sea data showed April 8.

Only three LNG carriers have transited the Panama Canal so far this month, compared with the 13 vessels the Panama Canal Authority had said were scheduled to transit between April 1-13, with at least one slot reserved per day over that period.

Some LNG and shipping market participants were expecting a sharp increase in Panama Canal transits this month, seeking cost savings as freight rates rose due to the war in the Middle East.

Only one of the carriers that have transited through the canal so far in April did so in the southbound direction: the laden Ignacy Lukasiewicz, which transited the canal on April 7. The carrier is chartered by Orlen and loaded from the Calcasieu Pass facility on March 31, destined for an undetermined location in Asia, data from S&P Global Energy CERA showed.

The other two transits were completed in the northbound direction by the Marvel Eagle and the Orion Monet on April 6 and 7, respectively. The carriers, chartered by Mitsui and BP, were returning to the US Gulf Coast following deliveries in Japan.

Two additional LNG carriers, the JERA-chartered Energy Fortitude and the Olympus LNG, were floating off the Pacific entrance of the canal on April 8, likely waiting to transit northbound, CAS data shows. Both carriers appear unladen based on their indicated draught following deliveries in Japan, according to CAS data.

Additionally, two more carriers currently sailing off the coast of Central America appear to be heading to the canal. The Excelerate Shenandoah, which transited the canal on March 22, seems to be heading for a potential northbound transit following a March 30 delivery to New Fortress Energy's La Paz terminal in Mexico. Meanwhile, the JERA-chartered Energy Fidelity appears to be returning to the Atlantic after a March delivery to Japan.

Monthly laden LNG transits through the Panama Canal have averaged three at least since June 24, while the number of monthly ballast crossings has averaged two over the same period.

There were four laden transits through the canal in March, up from only one in February and the highest since October of last year. Three of the laden March transits carried cargoes sourced from US LNG export plants, while the Excelerate Shenandoah was loaded with a cargo from Mexico's Altamira FLNG.

Except for the Excelerate Shenandoah, all three other laden March transits were destined for Asia. The Mitsui-chartered Marvel Kite and the JERA-chartered Nohshu Maru, which transited the canal on March 20 and 24, respectively, are set to deliver their cargoes in Japan. Meanwhile, the Mitsui-chartered Marvel Dove transited the canal on March 30 en route to deliver a cargo to Ulsan, South Korea.

As for ballast transits in March, only the Marvel Swallow returned through the canal on March 1 following a delivery to Japan.

For comparison, 35 of the 38 US LNG cargoes exported to Asian destinations in March used the Cape of Good Hope as their preferred route.

The transit of ballast carriers is poised to continue increasing later in the month. A calendar posted on the Panama Canal Authority website as of April 8 showed one southbound LNG transit scheduled for each of the following dates: April 14, 21, 25, and 28. Meanwhile, at least one northbound LNG transit is scheduled for April 12, 13, 18, 23, and 26. This reflects bookings corresponding to booking periods 1A and 2, the Panama Canal Authority previously said.