The Panama Canal Bureau aims to seduce lost energy trade by providing alternatives to move natural gas goods to key global transport gateways, with changes to the reservation system for LNG tanker canal transport and a new natural gas liquid pipeline project that provides energy and tanker companies.
Panama Canal Bureau administrator Ricaulte Vasquez tells CNBC that the canal is approaching reviving its priority booking slot system for LNG carriers as a way to bring back more business. Advance bookings for LNG were removed during a drought year and have not returned to the present.
“It is likely that we will revive the reservation windows for LNG vessels that are valid next year,” Vazquez told CNBC. The Panama Canal has moved to the long-term slot allocation approach, a reservation system that allows for one-year reservations, but he admitted that “it’s rarely used with LNG this year.”
“We improved our products after conversations with our customers,” he said, adding that the Panama Canal Bureau will be releasing additional packages for LNG transits that provide the flexibility to change tanker types and dates for transits.
“I think it would be helpful for them to schedule a transit to the Panama Canal,” Vazquez said. “We have some very specific packages and we have seen shipping companies competing in very specific transport… After our conversation with the industry, we are fine-tuning some elements.
The severe drought over the years has spent a considerable amount of its liquefied natural gas trade on the Panama Canal. The limit on the weight of the vessel due to low water levels led to a decrease in LNG passage through the canal, which sent LNG tankers on other transport routes, reaching 73%. Even with improved conditions, LNG shipments have not returned to previous levels. Careers continue to choose long routes around Africa’s bounty.
To release additional container slots for LNG, the canal is in the course of an ambitious pipeline project, creating what is called the Mesozoan Interoblast Energy Corridor. Instead of tankers carrying natural gas liquids such as ethane, butane and propane, through the canal, the NGLS passes through a 76-kilometer pipeline connecting the Atlantic and Pacific ports. Two maritime terminals will be constructed to accommodate the tanker. Approximately 2.5 million barrels of energy products can be moved from the pipeline per day.
On Thursday, canal officials met with about 30 businesses from Asia, the US and South America. Exxon Mobil, Phillips 66 and shell.
Vazquez also said that it was “a very good response from the Asian market.” Ito Corporation, Bank of Japan International Cooperation, Bank of Japan, Bank of Mitsubishi Bank, Athletic Industry, Nippon Koei, and Sumitomo were all present. Tokyo is the No. 1 buyer for shipping natural gas liquids through canals.
The process of selecting a pipeline and energy corridor concessionaire is underway, with bids projected for the second quarter of 2026.
Cargo volume is declining, and Chinese politics is at play
The canal is important for the US economy and trade. The United States is the largest user of the Panama Canal, with total US goods exports and import containers accounting for around 73% of the Panama Canal traffic, with 40% of all US container traffic passing through the Panama Canal each year traveling each year. Overall, around $270 billion in cargo is processed each year.
The energy cargo growth plan came after record-breaking container traffic in early 2025 by the Trade War Front Road, replacing forecasts of declines in transport for the remaining years and declines in transport through 2026.
“There’s usually no volume at this time of year, and container cargo compared to other years due to front loading is what it’s seeing now,” Vasequez said.
The Panama Canal generates revenue from the fees associated with shipping transport and the amount of containers carried to each vessel.
The maritime industry is navigating the ocean of uncertainty with tariffs, with Chinese shipbuilding fees imposed by the US government that has changed the tide of trade looming.
Starting October 14th, the costs mandated by US trade representatives are linked to new regulations on China-built vessels calling US ports. Chinese airlines such as Cosco and OOCL pay an additional fee to enter the US port, regardless of where they are built. The exceptions for voyages and ships shorter than 2,000 sailing miles are made for ships with 4,000 feet of equivalent unit (TEU) load capacity.
Data and analysis from the marine gut show early signs of a decline in Chinese-made vessel deployments on the West Coast route of Asia-North America.
“The share of Chinese-made vessels has fallen from a 25-30% level in the first half of 2025 to a 20-25% range in recent weeks,” said Alan Murphy, CEO of the Marine Intestine. “While not particularly noticeable, there are trends that can be seen in the East Coast Asian and North America trade,” he added.
The Panama Canal Bureau has an advanced reservation system that allows marine airlines to use to slot future transits. Based on data from that system, Vazquez tells CNBC that no changes to reservations will be seen, including vessels built in China.
“What we’re looking at now is essentially, of all the ships passing through the Panama Canal, there is likely 1,000 in China to be built. So there is no pressure on the market as there is a non-Chinese vessel alternative to passing through the Panama Canal. “We didn’t see any advances in bookings or bookings as we did in Cosco or OOCL,” he added.
At the same time, the feasibility study of the Port of Corozal will proceed to the contract phase, with results expected in the first quarter of 2026. Maersk recently acquired concessions from the CPKC and Lanco Group/Mi-Jack to operate the railway.
The port is part of a broader effort by the Canal to alleviate concerns about China’s involvement in ports essential to the operation of the canal.
The successful bidder can build a port facility and run it for 20 years.
There was speculation that Chinese-owned companies were banned from the bidding process, but Vazquez told CNBC: “We have not decided anything, and we probably can’t comment.”
Carl Bentzel, president of the National Waterfront Employers Association, which includes port and terminal operators, including MSC, CMA, Maersk and SSA, told CNBC it cannot disclose the names of companies that are bound by a confidentiality agreement and enter the bidding process. “But what we can tell you is that there is a lot of interest in participating in the expansion of the canal zone,” Benzel said. “Operating flexibility in Panama and serving multiple trade lanes are attractive and open to competition, so there’s a lot of interest,” he said.
Hutchison Port, a Hong Kong-based CK Hutchison force, agreed to sell concession deals at two ports adjacent to either side of the canal, which is adjacent to the consortium led by US asset manager BlackRock and MSC, after President Trump accused him of China of controlling him, but China has strongly criticized the contract.
In a recent CK Hutchison Stock Exchange application, the company wrote that “the group continues to discuss with members of the consortium, considering that it will invite key strategic investors of the consortium as key members.”
Terminals at Balboa Port (Pacific Coast) and Colon Port (Atlantic Coast) have been managed through the concessions at Hutchison Port since the 1990s, but earlier this year, Panama’s Chief Anel Flores filed a lawsuit before the Supreme Court to approve the charges that were filed. It is harmful to Panama’s interests.
No decisions have been issued from the Panama Supreme Court.
