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Panama Canal proposes new LNG toll structure

LNG Industry,

The Panama Canal Authority (ACP) has announced a proposal for a new toll structure, following more than a year of informal consultations with representatives from various industry segments.

The ACP Board of Directors approved the proposal in December. The authority is now inviting formal comments on the proposal, until 9 February, before holding a public hearing on February 27. The adjustments are scheduled to begin in April of 2016.

Maritime service

Commenting on the new structure, ACP CEO, Jorge Luis Quijano, said: “The ACP thoroughly analysed various alternatives and held conversations with the maritime industry for over a year. The proposal, in its current form, safeguards the competitiveness of the waterway, charges a fair price for the value of the route and facilitates the Canal´s goal of providing impeccable service to the global shipping and maritime community.”

The proposed restructuring calls for each segment to be priced based upon different units of measurement, while aligning with customers’ needs and requests, and modifying pricing for all Canal segments. For instance, containers will be measured and priced on TEUs, dry bulkers will be based on deadweight tonnage capacity and metric tons of cargo, passenger vessels will be based on berths, LNG will be based on cubic metres and tankers will be measured and priced on Panama Canal tons and metric tons.

LNG vessels

The new structure will apply to the existing Canal as well as the new lane of traffic when the expansion project begins operation in 2016. The new locks will allow shipping lines to transit the Canal with larger ships, providing greater economies of scale. Moreover, the expansion will open new global shipping routes and allow the transit of LNG.

The proposed tolls structure includes tolls for LNG vessels, a new trade for the Panama Canal. Currently, LNG vessels cannot transit through the waterway due to their beam dimensions, which are too wide to fit the existing locks. The proposed unit of measurement for LNG vessels is the cubic metre, which is widely used in LNG shipping and will ease the calculations of tolls for new customers to the Panama Canal. The new toll structure will also provide an incentive for the new LNG segment, where customers that use the same vessel for a roundtrip voyage through the Canal will have the option of receiving a special ballast fee, if the transit in ballast is made within sixty days after the laden transit was completed.

Major trade route

“The ACP strives to continually improve its customer service. Providing reliable, safe and efficient service in one of the world’s critical trade routes is our mantra,” added Quijano. “This singular focus on quality and customer service ensures that our clients receive the value they seek in using the ‘All-Water Route.’ Moreover, the alignment of price with value helps the Canal maintain its competitiveness, continually improving its service responsiveness while charging a fair market price.

Adapted from press release by Katie Woodward

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