Data on Page 15 shows that 2023 has been the highest level of ethane and ethylene exports volumes in the handysize segment over the past five years. It is also important to note that while U.S. ethylene export capacity is currently capped at around 100,000 metric tons per month, that is until our expansion is complete, ethane does not face the same infrastructure constraints. Nearly 250,000 tons of ethane was exported on handysize vessels in September compared to 150,000 tons during September of 2022. Therefore, Navigator Gas is strategically positioned, not just in the ethylene market, but also in the ethane market, all directly linked to the North American upstream natural gas liquids production. Our vessels regularly navigate the old blocks of the Panama Canal, creating a vital link between U.S. Gulf exports and demand centers across the Pacific Ocean.
On Page 16, we can see, to-date, this year, Navigator has scheduled nearly 100 transits through the Panama old docks, with an average journey time of just over two days, regardless of whether the vessels are in ballast or laden. This efficient transit process has facilitated a reliable and economical delivery service of both ethane and ethylene to our customers in the Asia Pacific region. However, this situation is poised to change. The water level in Gatun Lake, which provides essential fresh water to Panama City and its surroundings as well as for the canal’s lock operation is at a historical low point. To address this, the Panama authorities have reduced the number of transits for both new and old locks until the onset of the monsoon season.
We’ve been informed that additional transits won’t be permitted until at least April of 2024 next year. Until that point, the canal will provide transits at half capacity. So what does this mean in practical terms? The primary implication will be longer voyage times. The duration of round trips from U.S. exports to Asia of LPG, ethane and ethylene is expected to increase by 20 to 30 days on a round voyage, depending on whether the route is via Suez Canal or Cape of Good Hope. As a note, the Suez Canal, which has spare capacity has started enticing vessels traffic in this direction by offering discounts. As you can imagine, the trades are starting to shift. The secondary implication is that a vessel type preference through the Panama Canal. Even those granted canal transit might not be able to travel fully laden due to the reduced draft limitations as shown on Page 17.
Additionally, vessels able to transit will likely face severe delays being queued behind prioritized container ships, LNG carriers and cruise ships. For our ethane and ethylene trade, we anticipate two developments to happen. First, we expect an increase in demand for handysize vessels to transport ethane. This uptick is likely as larger ethane carriers face challenges in fulfilling their take-or-pay contracts at the 3x ethane export terminals in the U.S. as the voyages are longer. Second, to facilitate the profitable arbitrage of ethylene to Asian markets, midstream companies and upstream producers may need to manage their profit margins to allow the trade to continue at full tilt. Both things being equal, there is about $75 per ton of additional freight cost to sail East via Suez or Cape versus the Panama Canal without waiting days.
Despite these changes, our third quarter performance remains largely unaffected as shown on Page 18. Our earnings composition has only shifted slightly, with an increase in petrochemical cargoes at the expense of LPG. Ammonia continues to account for nearly 20% of our earning days, supporting other cargo segments, which, all told, resulting in our utilization around the 90% level. Page 19 showcases the overall robust market across the various gas carrier segments. The time charter levels currently being discussed and extended and negotiated are higher than those presented on this page, indicating strong market fundamentals for LPG, petrochemicals and ammonia. Finally, as indicated on Page 20, the supply of handysize tonnage remains steady from last quarter, with only 5 vessels or 4% of the existing fleet on order within our segment, which is a manageable figure, especially considering the expected phasing out of all the vessels nearing 30 years of age.
We will stand by for Q&A shortly as I’m sure there are a few questions regarding the Panama Canal in particular, but first, over to Randy for his update on recent announcements. Randy?
Randy Giveans: Thank you, Oeyvind. So following up on several announcements we made in recent months, we want to provide additional details on updated developments regarding a few of those announcements. So Slide 22, we are pleased to announce our return of capital for the third quarter of 2023, in line with our recently announced return of capital policy and the table below, we’re returning 25% of net income or $4.8 million to shareholders this quarter. The Board has declared a cash dividend of $0.05 per share, payable on December 21 to all shareholders of record as of December 7, equaling to a quarterly dividend payment of $3.7 million. Additionally, with NBGS shares trading well below our NAV of greater than $22 a share, we will use the variable portion of the return of capital policy to repurchase additional shares.
