The 51-mile long Panama Canal completed in 1914 connects the Caribbean Sea to the Pacific Ocean. By passing through the Canal ships reduce voyage distances by thousands of miles and journey times by 10 days or more. The Canal is currently constrained by the dimensions of its lock system that limit the size of vessel that can pass through. An expansion project started in 2006 and set to complete in early 2015 will increase the dimensions so that larger ships can use the canal. Today we assess the consequences for tanker movements.
This blog is going to expose you to a few nautical terms because we are talking about big ships and for some reason, as soon as operations people leave dry land they talk different. We will try and translate these nautical terms as we go along – with apologies to those already fluent in “offshore”. Since this is a general topic we will also try and avoid the nuances of tanker freight chartering and charges. They deserve a blog in their own right.
The Panama Canal is so important to world waterborne trade that a whole class of vessels called “Panamax” is specifically designed and built to squeeze through the lock system. Currently no vessel longer than 965 feet, wider than 106 feet and with a draft (depth in the water) greater than 39 feet can pass through (see diagram below). That equates to a cargo size of about 50 thousand metric tonnes (MMT) – roughly equivalent to 380 MBbl of West Texas Intermediate (WTI) crude oil. When the canal expansion is complete in 2015, the “Post-Panamax” dimensions (see the diagram) will allow vessels 1200 feet long, 180 feet wide and with a draft no greater than 50 feet. Tanker cargo size will increase to 80 MMT – equivalent to 600 MBbl of WTI.