Liquefied natural gas (LNG) vessels traversing the Panama Canal will be in a bottleneck until March of 2020.
By Michael McGrady, Maritime Direct Americas Correspondent
The price of liquefied natural gas and the shipping rates for LNG have hit records highs because of an ongoing bottleneck in the Panama Canal.
Considering these supply constraints and extremely heavy demand in Asian markets, the canal’s bottleneck has been complicated by freezing weather patterns and has further strained the transnational energy supply system.
Maritime Direct reported that rates have increased, virtually sending the overall market into a higher rate not seen in recent years.
Congestion from the delaying of LNG shipments through the Panama Canal are expected to further peak through the remainder of the winter months and into the early spring of this year.
Speaking under the condition of anonymity to Reuters, traders and seafarers familiar with these situations consider the congestion to be extreme and could last until March.
The Panama Canal Authority, the regulatory agency in charge of the canal, has stated that they have made changes to speed up transit as fast as possible.
Through the carrying of LNG from the United States, the Asian demand for this commodity has increased since December. From there, the canal’s transit reservation system on January 4 to try and reduce the logjam and allow LNG vessels to reserve two slots 80 to 15 days ahead of transit rather than just one.
“Currently, there are only two slots available for LNG. Ideally, there would be a lot more than that,” says Ross Wyeno, the lead LNG analyst for the Americas at S&P Global Platts, via Reuters and G Captain.
It should also be noted that some analysts have tracked the increase in LNG cargo prices at a rate of price inflation that is faster than bitcoin and other cryptocurrencies.
This is a developing story.
