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Panama Canal constraints persist for LNG tankers arriving without a reservation

Highlights

Average wait of 10 days for vessels headed to Pacific

Asia spot prices remain robust despite fall from record

Houston — LNG tankers passing through the Panama Canal without a reservation faced average wait times of more than a week Jan. 22, continuing the constraints that began in earnest in October.

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The passageway is the shortest tanker route from the US Gulf Coast to Asia, the world's biggest import market for LNG.

Panama Canal Authority officials originally blamed fog, higher-than-average arrivals and additional safety procedures to prevent further spread of the coronavirus. More recently, they cited the combination of global economic recovery and peak LNG season. The ongoing constraints come at a time when US LNG export activity remains strong.

LNG vessels that arrive with reservations transit the Canal promptly. For those without reservations, the average wait time as of Jan. 22 was 11 days for vessels headed northbound to the Atlantic and 10 days for vessels headed southbound to the Pacific, the Panama Canal Authority said in an email responding to questions. That compares with average wait times during the same week a month earlier of four days for LNG vessels headed northbound and 13 days for vessels headed southbound.

As of Jan. 21, three non-booked LNG vessels were waiting for transit, along with four booked LNG vessels that arrived early and were expected to transit on their reserved date, the Canal Authority said.

"Wait times continue to change on a daily basis," the Canal Authority said.

Robust spot prices for LNG deliveries to Asia have incentivized a pickup in US exports, which have been bolstered by an increase in new export capacity.

However, the persistent extended wait times for vessels without reservations at the Panama Canal have also forced many US LNG cargoes to sail eastward, avoiding the Canal altogether and adding a considerable cost to the overall voyage, S&P Global Platts Analytics data showed.