Page 12 - NorthAmOil Week 34

NorthAmOil COMMENTARY NorthAmOil

Container ship traffic
through the Panama
Canal is bouncing
back quicker than LNG
LNG was among the segments hit, with no US What next? tanker traffic.
exports of the fuel to China at all between March Transits through the Panama Canal are now on
2019 and February 2020. However, following a the up, however, as global trade rebounds from
preliminary trade deal agreed between the two the worst of the global lockdowns. In June,
countries in January 2020, China started grant- total transits through the waterway had fallen
ing tariff waivers to some of its LNG importers to 845 – the lowest level since the expanded
for cargoes from the US as the country worked canal opened – but in July, transits rose to 933
to meet its target for importing more US energy. in July.
These efforts to boost US-China trade were The Panama Canal Authority is trying to
hampered by the Asian country’s lockdown encourage this rebound, announcing recently
in response to COVID-19, though, and China that it was increasing the maximum authorised
remains significantly behind its target for ramp- draft for the transit of the Neopanamax locks
ing up US energy purchases. But despite doubts by 1 foot (0.3 metres) to 48 feet (14.6 metres).
over the trade deal’s ability to survive an upcom- It noted, however, that the draft was dependent
ing review, the SK Resolute’s current journey on water levels in Gatun Lake, and that vessels
shows that US LNG trade with China continues may be required to offload some of their cargo
for now. or take other measures to decrease their draft to
More recently, as other countries brought in transit the locks.
their own lockdowns in an effort to contain the Speaking to Bloomberg this week, Panama
spread of COVID-19, traffic through the Pan- Canal Authority deputy administrator Ilya
ama Canal took a further hit. In May, a total of Espino de Marotta warned that LNG and cruise
937 ships transited the canal, while a further 260 ship transits may be slower to rebound than
transits were cancelled according to Vasquez – a other types of traffic, such as container ships.
21% decline on expected numbers. Nearly half Indeed, it has been a slow summer for US LNG,
of the cancellations came from LNG and LPG with a number of contracted cargoes cancelled.
tankers, and the Panama Canal Authority also But these are now recovering, which is likely to
reported a loss of cruise ship traffic that normally translate into higher LNG tanker traffic through
peaks in the spring. the Panama Canal in the coming weeks.™

P12 www. NEWSBASE .com Week 34 27•August•2020