| Submit your comments on this article |
| Economy |
| LNG Tankers Paying to jump the Panama Canal Queue to Avoid Boiloff |
| 2023-11-15 |
| [HotAir] There are a few more things roiling the waters as far a the oceanic shipping industry is concerned that I thought were kind of interesting. I’ve already covered the continuing Panama Canal issue, but that low water and reduced traffic is causing it’s own corollary inflationary issues. While the traffic snafu continues unabated… …and the reduction in the number of ships being allowed to make the transit heads towards 18 by the end of February, some operators are taking extraordinary measures to ensure their cargo gets across the isthmus. They are ponying up the cash, and not just the extra required to make the day’s cut – they’re buying a license to jump the line entirely. Liquid natural gas carriers are in a time crunch, and I had never before known they needed to be. It turns out, if they sit around too long, their cargo boils off. It’s really interesting. Before LNG became the fuel of choice, vessels would actually use the naturally occurring “boil off” – which has to, to relieve pressure – to partially fuel the ship itself. Liquefied natural gas (LNG) tankers are burning more dirty fuel oil than normal after the price of their super-chilled cargo soared above that of oil, trade and shipping sources said. The boil-off rate with a vessel sitting in the warm tropical sun waiting to cross through the Canal is, I guess, significant enough that it’s worth paying literally millions to get that boat floating along. At the prices LNG is going for and with demand as high as it is, the operators can afford to pay the additional passage fee, but that is a crippling amount of money for your average shipper. …“You are getting close to $4.5 million to use the canal, so that is pricing out a lot of ships,” Oystein Kalleklev, chief executive officer of Flex LNG Ltd. and Avance Gas Holding Ltd., said during a conference call Wednesday when asked about the state of the canal. What does that do to the LNG price on the backside? I’m not sure how those markets are traded and where the shipping is added to the cost. Things have been so unstable, I know now in a lot of industries there aren’t locked in contracts with shipping included. Now you either pay it yourself, or eat the freight the wholesaler hits you for when he ships. However they dock you for it, the costs are hitting the consumer’s bottom line in the end. Finally, thanks to the appearance of a tropical storm that formed over Panama, Gatun Lake is projected to fill a bit – providing a little breathing room – but the long term outlook is still dreary. Again, because of that forecasted robust El Niño that is also set to bedevil refilling our Mississippi River. |
| Posted by:Griter Slash1619 |
| #3 The Panama Canal is boiling off? Jeez, that's gotta be due to Global Warming. Or maybe Concentrated Warming. How hot is it down there anyway? |
| Posted by: SteveS 2023-11-15 18:21 |
| #2 Panama Canal expansion project |
| Posted by: Skidmark 2023-11-15 09:35 |
| #1 Part of the 'unexpected' problem that they're having at the Panama Canal is the new locks are bigger, longer, wider, and use eight times as much water as the older locks (that are still in use) with every cycle. Plus they're having a drought, and they didn't widen the Galliard Cut (the narrowest part) all that much. So, they're using more water, and not getting as much as they need. |
| Posted by: ed in texas 2023-11-15 08:32 |