Oystein M. Kalleklev: We had the worst drought in Panama since the canal opened in 1914. Water levels are very low. Remember, this is a big canal. And when you’re putting ships through it, you need — you are losing water from the canal into the sea. So you have to refill these water balances from reservoirs and these reservoirs are at a low level. Typically one transit, you are losing 50 million gallon of water which is 190 million liters. So Panama have had to reduce the number of transit to keep the water level. So this has created a super tight market in the Panama Canal. Waiting times today, if you don’t have a slot, it’s almost 20 days. And that’s August. Last November, we saw them going up to 26 days. But that’s winter season.
Winter season is always more busy. You have the high season for container ships going for the shopping season. You have more export of LNG and LPG and typically more routes to Asia. So Panama clogging is a problem that’s not going away. Even though the drought is going away, Panama is jammed. And the reason is, Panama Canal was built for container traffic, increased container traffic, the Neo-Panamax container ships and this was decided before the shale revolution in America where certainly US became the biggest LNG exporter and the biggest LPG exporter and the canal has not been scaled to suddenly also take all that traffic. So that will be on inefficiency. We see it more on the LPG side in Avance Gas where we have routing ships away from Panama because it’s too much waiting time and it’s too difficult to fix a ship when you don’t know the schedule.
Knut Traaholt: So, then there is a bit of a crystal ball question, what’s your view on the LNG commodity prices in the short and longer?
Oystein M. Kalleklev: Right now of course it’s a — I believe, forward rates are not always a good predictor of prices. But I think it’s pretty accurate in the near term. Probably prices will stay tight for the medium-term or the short-term. There will be a lot of demand for the winter market. So prices will go up. Does not coming a lot of new LNG to the market near term, which means the market will stay tight. Europe will not get access to Russian pipeline gas. So there will be tight market. From ’25 onwards, there coming a lot more liquefaction plants and hopefully that can bring down prices because otherwise we are pricing out consumers and actually we would like to get prices down to $10 and less because then we can finally do something with coal, because LNG should be utilized, not only to replace Russian pipeline gas but also coal.
And if you are to do that, which is immensely important in terms of pollution, greenhouse gas emissions, then you need to get price which is affordable for developing countries, and not only European consumers.
Knut Traaholt: So that rounds up the questions. But we’ll include one more. It’s Lucy Hine from TradeWinds. What’s your guidance for your time to complete the Oslo Marathon?
Oystein Kalleklev: Guidance. Giving guidance on that as well now. To that, I’ve been too — so accurate on the guidance for our financials. Number one, we are attending Oslo Marathon. The Flex — the whole Flex team in actually — exactly one month, but we are not running the Full Marathon. We are running the Half Marathon. We don’t want to have too much wear (ph) on these guys. Let’s see. My goal is, I challenge my guys to beat me. Hopefully, I can beat one or two of them. Last time I — since I run my last Half Marathon, I’ve been doing 24 of these quarterly presentations. So that hasn’t helped my weight. Deadweight has gone up. So probably 15 minutes longer time than last time. So, below 150 run.
Knut Traaholt: Good.
Oystein Kalleklev: Yeah.
Knut Traaholt: That rounds up to questions. Thanks a lot for the questions.
Oystein Kalleklev: And Lucy, if you are there, if you are going to Gastech early September for the big Gas Conference, I know you like to run marathons. So, then of course, I will bring you, I had one of these Just Flex It T-shirts so you can run that — use that next time you run Marathon, not the Half Marathon, like lazy guys like Knut and me, but the Full Marathon. Okay.
Knut Traaholt: Then we need to round off with the winner of the Flex kits for the questions.
Oystein Kalleklev: Yeah. I guess we — Hawken Nunda (ph). We ended up at. I wonder if this is Hawken Nunda which I knew from my childhood. Let’s see. Okay. We will reach out to him and give him the T-shirts. So he also can run a Half Marathon or Full Marathon. Of course the Flex glasses and the boiler suits, but if he walks spot drilling, I’m pretty sure, we all get — have a boiler suit. Okay.
Knut Traaholt: Congratulations and thank you for all of your questions.
Oystein Kalleklev: Okay. Thank you, guys. And we’ll see you in November. Thank you.
