CAREEROUTLOOK | Industry Overview
Proof of Arango’s point was not long in coming. Cosco Shipping Panama, a massive container carrier, had to win an Authority lottery to become the first vessel to sail through the expanded canal’s “Third Set of Locks” on June 26. But as if to underscore Arango’s comments, the second ship through on June 27 was a Japanese-owned tanker, the Lycaste Peace, carrying a load of liquefied petroleum gas on its way from Houston, TX, to Hitachi, Japan. The LPG tanker Passat, owned by Avance Gas, followed in short order.
And if further proof was needed, in the month following the expansion project’s opening, 22 of the 53 vessels transiting the canal’s new locks and deepened channels have been tankers carrying U.S.-sourced energy resources out to the Pacific Rim.
U.S. Oil Boom Changes the Game
At a Canal Authority press briefing, top administrator Jorge Luis Quijano acknowledged that when the plans were laid out for the expansion project, petroleum shipments from the U.S. were not in the cards. But the shale drilling revolution changed things. Now, with the ending of the U.S. ban on oil exports, Panama also expects to be seeing crude oil shipments, with Very Large Crude Carriers moving American “light,” low-sulfur crude to ports all across the Pacific Seaboard.
Liquid Bulk Specialist Arango S., interviewed earlier, said that even could include fully loaded Suezmax tankers. High-sulfur “heavy” crudes, such as those produced in Venezuelan wells, would so weigh the tankers down that they could only be loaded half full, Arango said, but “condensate,” light crude, such as that produced from
Texas’ Eagle Ford and the Utica Shale in Pennsylvania and Ohio, or the light crudes coming from the Permian Basin in West Texas and eastern New Mexico, could more easily be moved through the canal.
Future-Oriented Planning
In today’s energy markets, where low commodity prices have crushed many a best-laid business plan and sent many energy producers (and some shippers!) to the bankruptcy courts, critics have questioned whether the Canal Authority made the wrong bet at the wrong time, looking to make money at a time when many of its potential customers are drowning in red ink.
Canal Authority Executive Vice President Ilya R. Espinosa de Marotta, an engineer involved in planning improvements for the canal for most of her 20 years at the Authority, dismissed that along with a litany of engineering issues raised in a recent New York Times report questioning the quality of the concrete used to build the locks, and complaints by the Panamanian Society of Civil Engineers, the Canal pilots’ union and the tugboat captains themselves about the decision to use tugs to move ships through the locks instead of the old system’s electric engines as just “old news.”
For as Authority Administrator Quijano said at the press briefing, it often is said that generals prepare for war with the army they’d like to have but fight their battles with the army they actually do have. Panama, he said, had long been working to build the logistics connection everyone would like to have, sure that the market would catch up to Panama’s forward- thinking audacity.
• It widened the Culebra Cut before the current Expansion Project began;
• Testing done over several years revealed that it was possible to institute two-way traffic in the Cut, and a new agreement with the Canal Pilots’ Union permits two- way “ship encounters” to begin; and
• Digging the new, wider, deeper shipping channels to the Cut from the 1,400-foot- long Cocoli Locks and their Aqua Clara siblings—don’t forget that the original canal locks will still be working—make it possible to greatly increase canal traffic.
How Panama Plans to Pay Its Bills
Thus, in Administrator Quijana’s view, Panama will see the tripling of canal transits it planned for. Using the old locks, big cargo and passenger ships were paying $200,000 to $300,000 a transit. Now, he said, a new, higher “toll structure” will enable Panama, in 20 years, to pay off the loans it took to build this $5.3-billion expansion project.
That’s despite a whopping $3-billion- plus claim for additional fees filed by the Spanish-led contractor team that built the new lock system. The Authority negotiated a moratorium on its collection, but that bill still is out there.
Still, Quijana was upbeat: “We’ve been through these commodity price cycles before,” he said. “We know how it comes out.” In Panama’s view, the future is bright with promise. Clouds of doom? Bah, humbug!
34 HISPANIC ENGINEER & Information Technology | FALL 2016
www.hispanicengineer.com
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