Specifically, Reuters was informed by the Panama Canal Authority that ships carrying LNG from the United States to meet the Asian demand waited for up to two weeks in December to navigate the canal.
The Canal has changed its transit reservation system by January 4, in efforts to reduce the logjam and allow LNG vessels to reserve two slots 80 to 15 days ahead of transit, rather than just one.
The price of liquefied natural gas (LNG) and shipping rates have hit record highs because of the bottleneck, supply constraints and heavy demand from Asia, where freezing weather has placed the energy supply system under strain.
Moreover, it is reported that the Authority is introducing auctions to sell off any slot that becomes available within two to three days before transit due to last-minute cancellations. So far, five auctions have been conducted and four slots have been awarded to LNG vessels, the authority said.
It is noted that traders and analysts expect that the situation will continue as is until March, when northern hemisphere temperatures rise and heating demand eases as there is a shortage of slots.
Concluding, some traders have cancelled LNG tenders because of the delays, but there are too many vessels for the three sets of locks that lift and lower vessels carrying all kinds of products through the 80 kilometer canal that spans the narrowest part of Panama and connects the Atlantic and Pacific Oceans.