Houston — A new monthly record was set in January for LNG tanker transits of the Panama Canal, as US shipments to Asia surged, according to the operator of the Canal.
Fifty-eight LNG vessels transited through the Neopanamax Locks last month, breaking the previous monthly record of 54 transits in January 2020, the Panama Canal Authority said in a statement Feb. 3.
Wait times for LNG tankers passing through without a reservation have eased so far in February. The average wait for those vessels stood at six days in both directions on Feb. 3, the Canal Authority told S&P Global Platts, responding to questions. Two weeks earlier, the average wait time for LNG tankers without reservations was 11 days for vessels headed northbound to the Atlantic and 10 days for vessels headed southbound to the Pacific.
The Canal is the shortest passageway from the US Gulf Coast to East Asia, the world's biggest import market for LNG.
Extended wait times at the Canal for LNG tankers without a reservation began in earnest in October 2020.
Fog , higher-than-average arrivals and additional safety procedures to prevent further spread of the coronavirus were initially blamed. More recently, the Canal Authority cited the combination of global economic recovery and peak LNG season. In its statement on the January transits record, the Canal Authority attributed the increased LNG traffic to record winter temperatures in Asia, which have caused LNG prices to remain robust.
After hitting a record $32.50/MMBtu on Jan. 13, less than nine months after plunging to a record low of $1.825/MMBtu, the Platts JKM, the benchmark price for spot-delivered LNG to Northeast Asia, has moderated substantially as the market rolled to March. Platts assessed the JKM at $8.350/MMBtu on Feb. 3.
The Panama Canal said it recently adjusted its operations to provide more flexibility to the LNG market.
In January, it modified a reservation booking system to allow any slot that becomes available for Neopanamax vessels within 96 hours prior to transit to be offered through an auction process.
Since the modifications, the Canal has conducted 25 auctions, of which nine have been awarded to LNG vessels, the Canal Authority said. In addition, the Canal said it was able to transit three northbound LNG vessels in one day, on Jan. 25, and transit four LNG ships, two northbound and two southbound, in one day on Jan. 31.