Last week, the Cabinet Council of the Republic of Panama officially approved the Panama Canal Authority’s proposed structure for toll charges applicable to LNG vessels transiting the newly-expanded Panama Canal. The new tariff structure is based on a tiered system involving the vessel’s capacity in cubic meters and includes, under certain circumstances, a discounted toll charge if a vessel transits through the Canal on a roundtrip voyage. The new toll structure will become effective April 1, 2016, when the Canal’s new set of locks are scheduled to open.
Details of the new toll structure for LNG vessels are as follows:
Click here to view the table.
Source: Panama Canal Authority (available here)
Ballast rates will be applied to LNG vessels transporting up to a maximum of ten (10%) percent of their cargo carrying capacity (to account for the presence of LNG heel). If a vessel engages in a roundtrip voyage to and from “a specific place” via the Panama Canal, it will be eligible for the ballast roundtrip discount on the return voyage provided that the return voyage through the Canal is made within sixty days after the laden transit was completed. The Authority’s use of the words “a specific place” may reflect an attempt by the Canal Authority to disallow the roundtrip discount if a vessel transits the Canal on a laden voyage and, prior to its return through the Canal in ballast condition, lifts and discharges a separate cargo, even if that ballast passage takes place within the required sixty-day period. It is unclear at this point, based on the current version of the tariff schedule and the fact that no supplemental guidance has been provided, whether a break-bulk operation (i.e., discharging a vessel’s cargo at more than one discharge port prior to its ballast transit through the Canal) would also make a vessel ineligible for the roundtrip ballast discount.
For reference purposes, we have set out below sample tariffs based on a number of common LNG vessel sizes:
Click here to view the table.
ote that Q-Max (263,000 - 266,000 m3) and Q-Flex (210,000 - 217,000 m3) LNG carriers are not permitted to transit the Canal due to the current maximum beam restriction of 49 meters. In addition, there are currently at least two Moss-type vessels with a capacity of 177,000 m3, called PacificMax carriers, that exceed the 49-meter limit. These tankers also would be unable to transit through the Canal. The new locks are 55 meters wide, however, and unlike the current locks are fitted with fendering along the walls, which a number of commentators have indicated may, after a period of operational experience, permit the Canal Authority to relax the safety margin and allow ships with a beam closer to 51 meters to pass through the new locks. That could open the Canal to Q-Flex and the two Moss-type PacificMax ships. Supporting this possibility and responding to concerns raised by some LNG buyers about the restrictions and their impact on Q-Flex vessels transiting the Canal, the administrator of the Panama Canal Authority, Jorge Luis Quijano, had the following reaction in regard to the beam restriction: “At first we’ll start with transits of up to 49 meters, progressing gradually to reach 51.2 meters” (The Bulletin Panama, May 4, 2014; The Wall Street Journal, April 23, 2014). If this relaxation of the beam restriction becomes effective, over 96 percent of the current worldwide LNG fleet (388 of 402 ships) will be able to pass through the Canal.