[Zardoz]

This will provide a handy shortcut for the superships that are too big to get through the Panama Canal: Rival to Panama Canal Planned

Seeking to cash in on booming Asian exports, Nicaragua will announce a $20-billion proposal next week to build a canal linking the Pacific and the Atlantic oceans that would accommodate ships too large to use the Panama Canal, Nicaraguan officials said Friday...

...The Grand Inter-Oceanic Nicaragua Canal would make use of the 60-mile-wide Lake Nicaragua and follow at least part of a route first proposed by American and European entrepreneurs in the 19th century, officials said.

"We will have a deeper draft than the Panama Canal and reach a different market than Panama," Monjarretz said in a telephone interview. "The construction of the canal … will be pushed forward by Nicaragua because it's necessary for global trade."

Think how much easier it will be for the Chinese to move plastic trinkets around the world! You wonder why this wasn't done a long time ago!

[coyote]

Good lord.

[Fergus]

I can envision a fleet of new monster tankers just big enough to fit through the new bigger canal.

[Rafa]

...The Grand Inter-Oceanic Nicaragua Canal would make use of the 60-mile-wide Lake Nicaragua and follow at least part of a route first proposed by American and European entrepreneurs in the 19th century, officials said.

Interesting.
If Nicaragua has been one of the countries of the world that most suffered invasions and aggresions from US army since the 19th century it was exactly for that reason: the interoceanic link.

However I'm a bit surprised at the revival of that project; does that mean that the ones that conrol the Panama canal think they could lose their control over it?
(interesting too: the Panama canal would be at fighter range (with extra tanks) from Venezuela; while Nicaragua will be out of range; in case of a militar confrontation that may play.)

[MC2]

Wow, that's a new idea...

Lemme guess: they're gonna use nukes to dig it?

LOL - deja vu all over again...

[Tanada]

d - The N. Canal: Might not happen. Might happen. Might be a bad in vestment. Might be a good investment. The Chinese may not actually be planning on making the investment but just using the press releases as a negotiating ploys in their other trades. I tend to just focus on what the Chinese are doing or say they are planning to do. Since my crystal ball is perpetually cloudy I try to avoid making predictions as to what will or won't happen or if such projects will turn out good or bad.

True enough. It just does not make any sense to me. Especially if you consider that the Arctic may be open for shipping in the coming decades.

I was thinking the same thing Dorlomin, but I looked on Youtube and there are a bunch of reports from Nicaragua about the new canal project
http://www.youtube.com/results?search_q ... agua+Canal
however I do not speak or understand Spanish so for many of them I am just looking at pictures. There were a few in English, but far more in Spanish.

So what would make Nicaragua a more attractive route than the Arctic I asked myself.

Then a light dawned, just like in the cartoons where the light bulb appears when someone gets an idea. China already has extensive trade with the USA and EU via Panama and Suez canals, so why go to so much trouble to expand when the melting Arctic is going to make trasnit faster cheaper easier?

If those are the markets of the future it would make zero sense at all. On the other hand if Venezuela, Brazil, Argentina, Sub Saharan West Africa are your markets of the future it makes lots of sense. All the countries on the Atlantic Ocean coastline south of the Equator are closer to the PRC via Panama/Nicaragua than they are via the Indian Ocean or Arctic Ocean route. The PRC has a lot of smart engineers in their leadership, they can look at great circle routes as easily as I can and come to the same conclusion, and they tend to think much longer term than the Western Democracies do.

We in the North Atlantic are the markets of the past. They are not throwing us away, the ice free Arctic gives them easy access. But for the Markets of Tomorrow transiting Nicaragua/Panama is faster cheaper and better than going south to the Drake Passage or north through the Arctic Ocean or west through the Indian Ocean.

[ROCKMAN]

Was looking for the costs to transit the P. Canal and stumbled onto this. At one point there is speculation that once widened the transit for an LNG tanker could be as high as $1 million. Lots of what-ifs. In addition to China's focus on S America apparently some Africa countries, like Angola, are starting to cast their eyes west as they once did towards the EU in the north.

http://www.icis.com/heren/articles/2012 ... -2013.html

The Panama Canal Authority (PCA) plans to release its proposed toll fee structure for LNG vessels transiting the planned canal expansion in the middle of 2013. The PCA has completed its own analysis into the economics of LNG trade flows, and is expecting approval of the proposed toll fee by its board of directors and the Panamanian government in December. Work to deepen and widen the 77km-long canal, which links the Atlantic and Pacific basins in Central America, is now 50% complete, and is on track to begin commercial operations in the second quarter of 2015. However, the commercial viability of most of the proposed liquefaction projects in the US Gulf will depend to some degree on the Panama transit fee.

The canal could, for instance, save Japan-bound cargoes out of Trinidad from having to transit through the Suez Canal - a saving of 5,302 nautical miles that, at 19.5 knots, translates to an 11-day shorter voyage. However, some market participants have expressed concerns that the Panama toll could be close to prohibitive, with some industry observers predicting that the fee could be as high as $1m per transit. The PCA official did not give any indication of what the proposed fee structure would be, but said that the authority understood that it would have to be competitive in order to attract the necessary trade flows and revenues.

The Panama Canal is a chamber structure, meaning that LNG vessels will have to pass through a series of locks before completing the 24-36-hour transit. This, in turn, has added to concerns about the ability of the canal to provide the flexibility needed to significantly increase the level of spot and short-term trade from the Atlantic to the Pacific Basin. However, de Marucci said that the PCA was confident that the expansion would be able to cater for the needs of the LNG market.

[Tanada]

One issue that remains with the Panama canal is if it remains a reservoir and lock canal it remains dependent on rainfall and reservoir capacity. The new super size locks are more water efficient than the old locks, but even so they use a huge quantity of water for every ship that passes through them. The canal is actually close to its limit of use because they have to keep the reservoir level at or above a certain level for ships to be able to transit freely. The only other choice that I know of is to add a major power plant and pumping station to push water from the last lock chamber back up slope to the reservoir instead of allowing it to flow out to the Atlantic or Pacific as is down now.

The new super size locks on each end have a recovery system that retains much of the lock water in a holding tanks so it can be reused instead of allowing it to just drain away like the old locks do. At this point in the dry season of the year they have to limit the number of ships transiting because of water supply issues. Some reports I have seen give an average delay of a week and some vessels are delayed up too two weeks before being able to transit. That is two weeks worth of crew pay and other overhead the ships want to avoid if at all possible, so if the Nicaragua Canal alleviates the water demand enough to speed up transit in both canals it will be a big boost to shipping expenses even if the traffic is exactly the same number of ships.

[Tanada]

Some video about the new canal project I found online.

http://www.youtube.com/watch?v=n7JtpHosgE4

http://www.youtube.com/watch?v=iRmu4TwDokY

http://www.youtube.com/watch?v=VPxNQArkMXY

You can watch all four of them in 25 minutes, the details are sparse but one part of the plan is clear, the canal from the Pacific to Lake Nicaragua is a vital first step. I will be watching for that stage to get under way. That portion is only 10 km or about 7 miles. That would allow heavy dredging equipment to be shipped through the lake to the far shore and start the long leg of the canal to the Atlantic from both ends.

Whoops one of those was a conspiracy theory video, I took it out and now its about 10 minutes of your time.

[ROCKMAN]

Tanada – Thanks. Folks should watch that third link. Some very interesting info beyond building another canal in Nic. High lights:

New: Triple-E ships are estimated to be carrying more than half the cargo in the world eventually. They can carry 18,000 containers compared to the 4,000 carried by PC class ships. Even the expanded Panama Canal won’t be able to handle the TE class. Even more interesting: the majority of major US ports won’t be able to handle the TE class. The govt has been collecting a tax designed for port expansion but has been using about half of it to run other segments of the budget.

Not sure how the whole puzzle will eventually fit together: Nic. Canal, bigger P. Canal, bigger ships, China’s growing trade in S America, LNG exports, US ports losing business, etc. But it’s definitely a long game plan that looks as though it will take 15 to 20 years to determine who wins this contest.

[EdwinSm]

The canal could, for instance, save Japan-bound cargoes out of Trinidad from having to transit through the Suez Canal - a saving of 5,302 nautical miles that, at 19.5 knots, translates to an 11-day shorter voyage.

The third video had a bit about the Panama Canal being so busy that ships now have a wait of up to 12 days - this sort of cuts out the advantage of 11 days less in sailing time.

[Keith_McClary]

Maersk Triple E class From Wikipedia

Slower than its predecessors, this class uses a strategy known as slow steaming, which is expected to lower fuel consumption by 37% and carbon dioxide emissions per container by 50%.
...
Maersk plans to use the ships to service routes between Europe and Asia, projecting that Chinese exports will continue to grow.
...
They will be built by Daewoo Shipbuilding in South Korea; the initial order, for ten ships, was valued at US$1.9 billion
...
When the class was ordered, no port in the Americas could handle ships of their size. Suitable ports include Shanghai, Ningbo, Xiamen, Yantian, Hong Kong, Tanjung Pelepas and Singapore in Asia, and Rotterdam, Gothenburg, Bremerhaven, Felixstowe and Gdańsk in Europe. The ships will be too big for the New Panamax sized locks on the Panama Canal,[28] and their main route is expected to be Asia-Europe (through the Suez Canal).[29] The draft of the Triple-E is 14.5m, less than the SuezMax requirement of 52.6 ft (16.0 m) at 59m beam.[30] Handling equipment at ports was the main constraint on size, rather than the dimensions of canals or straits.[9]

[Subjectivist]

With the recent expansion of the Suez canal and the Panama canal, and now the plan to build a Nicaragua canal what are the odds China or Canada will upgrade the Saint Lawrence Seaway? Right now Seawaymax ships are far smaller than even old Panamax size ships.

[ROCKMAN]

sub - At the moment the prospects don’t look very good. From a couple of years ago:
http://www.jsonline.com/blogs/news/129045873.html

Almost a decade after the U.S. Army Corps of Engineers suggested expanding the St. Lawrence Seaway to make it a more relevant route for the world's ever-expanding fleet of freighters, conservationist groups this week are celebrating that the agency has formally scrapped that proposal. The manmade shipping link between the Great Lakes and Atlantic Ocean was already too small for much of the world's fleet when it opened over a half century ago. That's a big reason why the Seaway's cargo flows haven't matched the region's expectations.

In a lengthy 2002 report analyzing the Seaway's woes, the Army Corps suggested that one way to boost traffic was to expand the system's locks and channels so bigger boats could squeeze into the lakes and visit ports like Green Bay, Milwaukee and Duluth. That idea didn't float with a host of environmental groups and regional politicians worried that a multi-billion dollar expansion would likely lead to more unwanted species as well as other environmental problems like erosion. They also questioned the wisdom of investing so heavily in a system that must be closed down each winter due to ice.

The Army Corps backed off the idea of expanding the U.S. and Canadian owned Seaway several years ago, but evidently it didn't formally drop it until a recent update to its Seaway study.

[Subjectivist]

sub - At the moment the prospects don’t look very good. From a couple of years ago:
http://www.jsonline.com/blogs/news/129045873.html

Almost a decade after the U.S. Army Corps of Engineers suggested expanding the St. Lawrence Seaway to make it a more relevant route for the world's ever-expanding fleet of freighters, conservationist groups this week are celebrating that the agency has formally scrapped that proposal. The manmade shipping link between the Great Lakes and Atlantic Ocean was already too small for much of the world's fleet when it opened over a half century ago. That's a big reason why the Seaway's cargo flows haven't matched the region's expectations.

In a lengthy 2002 report analyzing the Seaway's woes, the Army Corps suggested that one way to boost traffic was to expand the system's locks and channels so bigger boats could squeeze into the lakes and visit ports like Green Bay, Milwaukee and Duluth. That idea didn't float with a host of environmental groups and regional politicians worried that a multi-billion dollar expansion would likely lead to more unwanted species as well as other environmental problems like erosion. They also questioned the wisdom of investing so heavily in a system that must be closed down each winter due to ice.

The Army Corps backed off the idea of expanding the U.S. and Canadian owned Seaway several years ago, but evidently it didn't formally drop it until a recent update to its Seaway study.

http://finance.fortune.cnn.com/2012/06/ ... al-estate/

Rockman please see the above link, a Chinese corporation spent millions buying up port facilities on the Maumee river in Toledo two years ago. I think they had a reason to do that, at the time the port property had been sitting undeveloped for a long time. There was a little bit of discusion between local citizens over if the port of Monroe could get them to buy a little further north because rail access would have been easier to expand and there is a vacant complex across the street in Monroe that was built on spec right before the housing bubble popped. The Monroe site would give both rail and truck access but the port has declined for decades, now it is mostly a turning basin in the river Raisin and few ships dock there.
[url]
http://monroetalks.com/forum/index.php? ... #msg227984[/url]
Not the the most recent topic of online conversation, but it has been discussed for years in these parts.

Dragging myself back on topic, any idea when they will be breaking ground in Nicaragua on this new project?

[ROCKMAN]

Sub – Interesting. While research I ran across a number of articles about expanding rail and truck transport infrastructure to allow for a more effective use of the SLS. Considering the Chinese are one of the biggest shippers on the planet it’s not a surprise to see them involved. Today they appear to be the most opportunistic force roaming the planet. One day they’re trying to get a piece of US pork retail business and the next helping Brazil expand their refinery capabilities.

As far as the Nic. Canal it might be a tad early to think about a ground breaking date. It sounds like more of a letter of intent to do a study than a commitment to spend $40 billion. I can imagine the final decision will hang on matter outside of Nicaragua. A big game with a lot of very big moving parts I suspect. I’ll guess the letter of understanding is being used to negotiate ventures in the hemisphere. The Chinese like making a profit but in the end they have one main focus IMHO: accessing sufficient future resources to feed their economy

[GHung]

Nicaragua canal: Construction to begin in December:
http://www.bbc.com/news/world-latin-america-30140244

Nicaraguan officials say construction of a $50bn (£31bn) canal linking the Atlantic and the Pacific oceans will start on 22 December.

"We are ready to begin," said Zhu Xiaoya, from the Hong Kong-based company HKND which is to build it.

The 278km (172 miles) waterway will be longer, deeper and wider than the Panama Canal.

Opponents are concerned about the impact it may have on Lake Nicaragua and on poor communities in the area.

The route announced in July would pass through the lake, an important source of fresh water. Construction will begin with a port on the Pacific.

Environmentalists have warned of the risks of damming rivers and moving massive amounts of soil. Communities along the route have staged protest marches.

The plan is to build the canal within five years and have it operational by 2020.

The project is expected to include two ports, an airport, a resort and an economic zone for electricity and other companies.

A 600m (2,000ft) bridge would span the width of the canal.

"We are sure that the rumours about the project will end as it advances and this century-old dream of Nicaraguans is realised," said Mr Zhu.

http://en.wikipedia.org/wiki/Nicaragua_Canal

Proposed canal routes in red (2013). Blue: Panama Canal. The canal starting construction in 2014, will follow the second route from the top, south of Bluefields.

http://en.wikipedia.org/wiki/Nicaragua_Canal#2010s

In 2010, Nicaragua signed a contract with two Korean developers, Dongmyeong Engineering & Architecture Consultants (DMEC) and Ox Investment, to construct a deepwater port and facilities at Monkey Point on the Caribbean coast to improve capacity there.[34]

On July 27, 2012, engineering services provider Royal HaskoningDHV announced[35] that the Nicaraguan government commissioned a feasibility study to be completed in early 2013 at a cost of US$720,000. The contract has been awarded to a consortium made up of Royal HaskoningDHV and Ecorys.

On September 26, 2012, the Nicaraguan government and a newly formed Hong Kong–based company signed a memorandum of understanding that committed HKND Group to financing and building the Nicaraguan Canal and Development Project.[3][4][36] HKND Group is a private enterprise.[37] HKND Group has now entered the study phase of development to assess the technological and economic feasibility of constructing a canal in Nicaragua, as well as the potential environmental, social, and regional implications of various routes.[36] The canal and other associated projects would be financed by investors throughout the world and would generate jobs for Nicaragua and other Central American countries.[38]

Questions:

Seems the Chinese may have their own canal between the Pacific and the Atlantic, on paper anyway. What are the economic and political implications? How much Gulf Coast oil are they planning to move from east to west?

What effects on an expanded Panama Canal will this have? Is there even the need for another canal, in light of peak oil? Can these massive projects be maintained, in a post-industrial age?

[yellowcanoe]

The Panama Canal expansion is budgeted at over $5 billion so I am somewhat skeptical that an entirely new canal that will be significantly longer than the Panama Canal as well as deeper and wider can be constructed for $50 billion.

[BobInget]

I've only been in Nicaragua a few weeks, half the time, goofing off on the beach. From a tiny sample of Nica's interviewed, most folks here seem
in favor of the canal project. Officials claim 87% approval.
The problem, like with Keystone XL, no one is asking poor substance farmers whose land will be 'taken'.
These folks, I'm told by folks on the Left (Sandinistas) and Right, (former contras) are prepared to fight to hold on to their lands.

Considerable environmental damage will undoubtedly occur to Lake Nicaragua, the largest fresh water containment in Central America.
Salt water intrusion along the canal's path ruins farmland.
I hope financing falls through. If not, there will be yet another civil war.

[Paulo1]

re: What are the economic and political implications?

I would assume refined Canadian product will be moved from the Gulf as well as unrefined bitumen from Canada's east coast.

This should piss off the neo-cons, at least those that sold their Syncrude stocks in this price drop.

Paulo