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Wednesday, September 19, 2018

Proposed Suez Canal Expansion

Lloyds List recently reported that the proposed Suez Canal deepening project would open the way for bigger tankers. Deepening the Suez Canal will allow ships with a draft of up to 62 feet to use the waterway by the end of next year, Ahmed Fadhel, the Chairman of the Suez Canal Authority said.

Furthermore, the canal will be able to take ships with a draft of 66 feet by 2005 and 72 feet by 2010, Mr. Fadhel said. "These drafts will enable the canal to accept giant oil tankers of up to 360,000 tonnes".

In 1998 Europe imported 191.1 mil tonnes and the U.S. 113.5 mil tonnes of crude oil from the Middle East Gulf countries. We assume that some 60 mil tonnes go via the Sumed pipeline per year.  If we further assume that half the Iraqi oil comes from the Gulf port (the rest via Pipelines to the Mediterranean) and that all VLCCs from Europe and the U.S. today return through the Suez Canal in Ballast, the total need for VLCCs is some 148 per year based on the 1998 figures.  Should the VLCCs also sail laden from the Middle East Gulf to the U.S. and Europe through the Suez Canal, this may reduce demand by some 29 units.

Please note that the new 2 million barrels VLCCs have drafts of 72 feet upwards. However, the ships could thus sail laden through the Canal with a slightly reduced cargo intake. We do however want to stress that the Suez Canal Authorities have also previously announced plans to expand the Canal and very little has happened.

This story and other market information will be available in the January 2000 INTERTANKO Market Report. For further information please mailto:erik.ranheim@intertanko.com