On July 27 the Lycaste Peace, a very large liquefied petroleum gas (LPG) carrier constructed by Mitsubishi Heavy Industries, Ltd. (MHI), became the first ship to pass through the newly expanded Panama Canal as the waterway marked its first day in commercial operation.
Expansion work on the Panama Canal was completed on June 26, with commercial operation of the new waterway commencing the next day. The Lycaste Peace is en-route to Japan carrying LPG loaded on the U.S. coast of the Gulf of Mexico.
The Panama Canal Authority estimates that the enlarged waterway will cut sailing times between Atlantic Ocean ports and Asia by up to 16 days for ships that previously could not fit through.
LNG and LPG sellers from the U.S. Gulf and Caribbean should benefit from the expansion. The U.S. is ramping up LNG and LPG exports after the shale extraction boom and will compete with Middle East LPG sellers and Australian LNG exporters.
"It will create competition for all the producers in the Arabian Gulf by getting products from the U.S. almost as quickly as from the Arabian Gulf," said a senior executive at a tanker shipping company who declined to be named.
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