The expanded and its impact on global trade Marianela Dengo Manager, Strategic Relations Management Section

September 13, 2016 Inaugural Transit –COSCO Shipping Panama

June 26, 2016

Neopanamax Locks – Transit of Vessels and Reservation Slots [CELLRANGE] [CATEGORY FY2016 NAME] [CELLRAN (from 13-Sep-2016 to 30-Sep-2016) [CELLRANGE] [VALUE] GE] [CATEGORY [CELLRANGE] [CATEGORY [CATEGO NAME] [CELLRANRY [VALUE] NAME] GE]NAME] ELLRANGE] [VALUE] [CATEGO[VALUE] CATEGORY RY[CELLRAN 47 [CELLRAN NAME] GE] GE] [VALUE] NAME] [CELLRANGE] [VALUE][CATEGO [CATEGO 179TRANSITS RY RY [CATEGORY (3 WITHOUT RESERVATION) NAME] NAME] NAME] [VALUE] [VALUE] [VALUE] [CELLRANGE] [CELLRA FY2017 FY2018 [CATEGORY NGE] (from 1-Oct-2016 to 30-Sep-2017) (from 1-Oct-2017 to 30-Sep-2018) NAME] [CATEGO [VALUE] RY Passe [CELLRA NAME] … nger NGE] 11 [CATEGO[CELLRA 135 [CELLRA RY NGE] NGE] 11 NAME][CATEGO … [CATEGO Updated as of 12-Sep-2016 (inclusive) RY RY NAME] … NAME] … It is all about connectivity!

• 144 routes • 1700 ports • 160 countries

Dimensions of Locks and

Existing locks maximum vessel size: 4,400 TEU

110’

39.5’ 106’

160’

60’ 50’

New locks maximum vessel size: 13,000 – 14,000 TEU Who is benefiting from the Panama Canal expansion?

Main user PORTS EXPORTERS SHIPPING countries LINES IMPORTERS SUPPLY CHAIN CONSUMERS

United States China Chile Japan Peru South Korea Colombia Mexico Ecuador Canada Panama

Economies of scale; efficiencies in the supply chain; connectivity Vessel types that are already using the expanded Canal

LNG - MEMBRANE

CRUDE/PRODUCT

CONTAINERSHIP

VEHICLE CARRIER

LNG - MOSS

Containerships, LPG tankers, LNG carriers, and vehicle carriers/roro Differences in vessel’s size and capacity More cargo at lower cost Containerships 3X

Panamax Neopanamax Capacity Capacity 3,000 – 5,000 TEU 5,000 – 14,000 TEU Differences in vessel’s size and capacity More cargo at lower cost Dry Bulkers 2X

Panamax Capesize : 75,000 DWT Tonnage: 180,000 DWT 67,000 MT of cargo 130,000 MT of cargo Differences in vessel capacity

Tankers 2X

Panamax Tanker Tanker 70,000 dwt 160,000 dwt 450,000 barrels of capacity 1,000,000 barrels of capacity Differences in vessel capacity

Vehicle Carrier / RoRo 1.3X

Panamax Neopanamax 6,500 CEU 8,500 CEU Differences in vessel capacity

Passenger Vessel 1.8X

Panamax Neopanamax 2,300 PAX 4,100 PAX LNG: The new player

The Panama Canal, an enabler for LNG trade and a new asset for the global value chain LNGLNG new new trade route route

Neopanamax Cargo capacity: 145,000 m3 LNG new trade route

Neopanamax Cargo capacity: 137,100 m3 Lower 48 states shale plays

Source: Energy Information Administration, January 8, 2015. Terminals approved by DOE/FERC

ANNOUNCED DATE FOR CAPACITY PROJECT LOCATION STATUS TRAINS OPERATIONS (MTPA)

SABINE PASS LNG CAMERON PARISH, LOUISIANA UNDER CONSTRUCTION 2016 4 X (4.5 MMTPA E/O) 18

DOMINION COVE POINT CHESAPEAKE BAY IN MARYLAND UNDER CONSTRUCTION 2017 1X (5.75 MMTPA E/O) 5.75

CAMERON LNG LOUISIANA, U.S. UNDER CONSTRUCTION 2018 3 X (4.0 MMTPA E/O) 12

FREEPORT LNG QUINTANA ISLAND, FREEPORT, TEXAS UNDER CONSTRUCTION 2018 3X (4.4 MMTPA E/O) 13.2

APPROVED BY FERC IN CORPUS CHRISTI LA QUINTA CHANNEL, TEXAS 2018 3 x (4.5 MMTPA E/O) 13.5 DECEMBER 2014

62.4 ACP Strategic Planning Horizon

Boost growth and opportunities Expand core business

Maximize core business returns

Horizon 1 Horizon 2 Horizon 3

2000-07 2007-16 2016-21

• Canal Expansion. • Efficiently manage the • Market segmentation and expanded Canal implementation of new toll • Prepare the organization to rates. manage an expanded Canal. • Take advantage of the opportunities provided by the expanded Canal, through diversification in complementary activities Impact on Logistic Cluster

Needs for additional capacity

• Additional container terminal port capacity • Railroad Improvements • economies of • RoRo capacity scale to carriers • Multi-purpose capacity • reduced cost per unit of cargo Opportunities • More transshipment • Energy Panama Canal • New routes • Logistic Parks - value Expansion /commodities added DIVERSIFICATION STRATEGY

Corozal Container Terminal LNG Terminal  New container terminal to  Capitalizes on global LNG flows by offering LNG serve more than 5MM TEU. bunkering to vessels.  Competitive LNG traffic toll system will support U.S. to Asia market.

Roll-On Roll-Off Terminal Pipelines  Potential for a dedicated  Opportunities related to the flow of terminal for vehicle petrochemicals and refined products transshipment in Panama. from one ocean to the other.

Vessel Repairs Services Logistics Parks   Offers a strategic Facilities to provide major location for scheduled repairs, routine distribution and maintenance or emergency value-added repairs. activities.

Bunkering Top-Off Operations  Opportunities  Potential for developing a to obtain a ship-to-ship top-off operation larger market in Panama. share in vessel bunkering. Power Generation  Cost-competitive through the use of LNG as alternate fuel source.

The Panama Canal It is all about reliability, connectivity, and value added services

ASIA Savannah, Charleston, Norfolk Houston 3-4 days

Caucedo (Dominican Rep.) Kingston (Jamaica) 1-2 days Lazaro Cardenas (Mexico) 3-4 days Cartagena (Colombia) PANAMA Less than 1 day Approximately 18 to 20 days at 18 knots Callao (Peru) 3-4 Days

Santos (Brazil) San Antonio 10-11 Days (Chile) 5-6 Days 80% of container vessels that transit the Panama Canal call at a local port • $1 Billion • Construction: ⁻ Phase I: 1,300 Jobs ⁻ Phase II: 800 jobs Operation: PHASE 2 • 52 hectares ⁻ Fase I: 2,600 2.1 million TEUs ⁻ Fase II: 1,200 12 cranes • Contribution: $25 - $100 (2018 – 2038) 25 E-RTGs • Added -value to the Route: $60 – 70 PHASE 1 M/annualy 67 hectares 3.2 million TEUs 20 cranes 49 E-RTGs

NEW CONTAINER TERMINAL IN COROZAL SPECIAL ECONOMIC ZONE

BIOFUELS

WAREHOUSES / INDUSTRIAL / COLD STORAGES LOGISTICS PARK RORO TERMINAL BARGES

Commercial development of approximately 1,200 hectares of recovered area located on the West Bank of the Panama Canal. Potential creation of a special economic zone for logistics/industrial parks space.

LNG TERMINAL

USTDA GRANT FOR A FEASIBILITY STUDY:

• Supply ACP internal demand • Supply LNG to ships calling Panama Canal and ports • Re-di stribute LNG to the region

Purpose: to strenghten the Panama route

THANKS!