Shipping company pays record $5.3 million to transit Panama Canal amid rising demand

South Korea’s SK Gas has agreed to pay a record $5.3 million to secure a Panama Canal transit slot for its LPG carrier G. Spirit on September 1, as demand rises and fewer slots are available.

The payment, worth about 7.3 billion won, is the highest amount paid in a Panama Canal transit auction, Bloomberg reported on August 26. It is also higher than the previous record of $4.6 million, or about 6.4 billion won, set earlier this month by SK Shipping. The auction gives G. Spirit the right to travel northbound through the canal.

The Panama-flagged LPG carrier has a deadweight capacity of 54,502 tonnes and is managed by SK Shipping. The vessel was waiting on the Pacific side of the canal for its transit, according to Bloomberg data.

The auction price has risen sharply as shipping companies face longer waits and fewer canal slots. Ships arriving without reservations have had to wait for as long as 11 days, according to Argus Media. The Panama Canal Authority said recent auction results showed significantly stronger demand than before February, when the median auction price was about $55,000. The latest bid is nearly 100 times that amount.

The canal is also facing lower water levels because of dry conditions in the region. Rainfall in the canal area was 34% below average from May to August, while water flowing into the canal was 44% below average, according to the Panama Canal Authority. The authority will reduce transit slots from September and may also limit the amount of cargo ships can carry. From September 4, the Neopanamax locks will have nine slots a day, including one slot offered through auction. Most ships use the canal’s reservation system, while ships without a reservation or those in a hurry can bid for open slots, with the auction fee separate from the regular canal toll.

LNG and LPG carriers get priority in some auctions. Under a rule announced on August 25, LNG ships will get first preference for cancelled or newly available slots, followed by LPG carriers.

Demand for canal slots has also increased after the Iran war disrupted major trade routes, especially those to Asia. At the same time, the canal is cutting capacity because water levels are falling, and with fewer slots available, competition for them has increased.

SK Gas was founded in 1985 and is based in Seongnam, South Korea, operating as an LPG distributor and international trader. The company held a 30.9% share of South Korea’s domestic LPG market at the end of 2025 and operates 480,000 tonnes of LPG storage capacity at terminals in Ulsan and Pyeongtaek. SK Shipping is a South Korean shipping company with a fleet that includes very large gas carriers. The previous $4.6 million record was linked to G. Arete, another LPG carrier operated by SK Shipping.