Suez Canal cancels rebates for LNG vessels

LNG vessels had previously been granted a rebate rate of 15%

American crude oil tanker ‘Kriti Breeze’ in the Suez Canal, where rebates on transit charges have been cancelled. Reuters

Rebates on transit fees granted by the Suez Canal Authority to vessels carrying liquefied natural gas have been cancelled, the authority said on Monday in a document released on its website.

The previously agreed markdown of 15 per cent will from Tuesday no longer be implemented, the SCA said.

Toll rebates granted to LNG-carrying ships traversing the canal have been on a steady decline since 2014, when the rate was 35 per cent. The rebate rate was decreased to 25 per cent in 2015 amid rising oil prices that increased demand for natural gas in key markets.

The rate was again reduced by the SCA to 15 per cent in October of last year.

The canal is the preferred route for American LNG carriers on their way to East Asia and looking to avoid a highly congested Panama Canal.

Transit fees for all ships crossing the Suez Canal were increased this month by varying amounts, the highest being 10 per cent for LPG carriers.

The SCA’s annual revenue hit an annual high in 2021 of $6.3 billion.

A large-scale expansion of the waterway is currently under way, scheduled for completion in 2023.