SK Gas Pays Record $5.3m for Panama Canal Transit Slot

SK Gas has set a new record for an expedited transit through the Panama Canal, paying $5.3 million to secure a passage as drought restrictions and rising demand put increasing pressure on the key shipping route.

According to Bloomberg, the South Korean company submitted the winning bid during an auction this week for its LPG carrier *G. Spirit *to make a northbound transit through the canal on September 1. The payment surpasses the previous record of $4.6 million, which was established earlier this month.

The record-breaking figure demonstrates how dramatically the cost of securing guaranteed access to the canal has increased. Before the outbreak of the Iran war, the median auction price for a transit slot stood at approximately $55,000, according to the Panama Canal Authority.

Ships arriving at the canal without advance reservations are currently experiencing waiting times of up to 11 days. Congestion could become even more severe as the Panama Canal prepares to further reduce the number of vessels able to transit the waterway.

Daily booking capacity is scheduled to decrease from 34 ships to 32 from mid-September as insufficient rainfall forces authorities to conserve freshwater.

Beginning September 3, the canal will offer nine neopanamax and 25 panamax booking slots. The number of available panamax slots will then be reduced to 23 from September 15.

Canal authorities have also been making changes to permitted vessel drafts in response to fluctuating water levels. However, some previously announced draft reductions have recently been postponed as officials continue to assess changing conditions.

“Tighter booking limits could increase congestion and push more tanker tonnage toward alternative, longer routes if water conditions continue to deteriorate,” broker BRS warned in a new tanker report.

The disruption could also have implications for the dry bulk sector. MB Shipbrokers said reduced transit availability and tighter draft limits may encourage bulk carriers to take longer routes around Africa or Cape Horn.

Longer voyages would increase tonne-mile demand, with the impact potentially becoming greater if the United States records a strong grain harvest and American grain exports to China increase following recent trade agreements.

Concerns surrounding water availability intensified on Tuesday when Panama’s government declared a nationwide state of emergency because of El Niño conditions. Authorities reported that rainfall shortages on Panama’s Pacific side have reached as high as 60%, while 11 watersheds are already experiencing water stress.

El Niño is currently categorized within Panama as very strong, with the weather pattern expected to persist well into 2027.