Beyond that, there are plans for an expanded interoceanic land corridor on the western side of the waterway and a green fuel supply center for ships transiting the canal.
The lessons learned by ACP and Espino de Marotta in overcoming the challenges of the third lane expansion are proving invaluable. The structure of the contracts, as well as initial restrictions on consortium eligibility and clear rules on supply chain diversity echo the successful approaches used in this effort.
“We’re implementing what we believe will make this a more robust process with less impact for both the contractor and the channel,” says Espino de Marotta.
In fact, the current wave of projects began shortly after the expansion was completed a decade ago. In early 2017, administrator Jorge Luis Quijano revealed a list of nine items for potential development, and today five of them are moving forward. It was, in his words, part of the continuous evolution of the waterway.
“The channel never stops updating,” Quijano told ENR recently.
A transistme energy corridor
The largest project underway for ACP’s planned logistics corridor is a 47.2-mile pipeline, with a size of 2.5 million barrels per day of propane, ethane and butane. This “energy corridor” would run along the route of the canal connecting new terminals near each entrance. Bulk gas cargo is the canal’s second largest customer, and running a portion of this land route frees up additional capacity on the waterway for the No. 1 customer, containers.
“If I take part of my LPG market off the ground, I have three more spaces for locks. It’s a way to increase your performance, increase your traffic and increase your income,” says Espino de Marotta.
The cross-isthmus unloading and reloading model is not without precedent. In 1982, an 81-mile-long crude oil pipeline with a maximum capacity of 860,000 barrels of oil per day opened near the country’s western border with Costa Rica.
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The new LPG pipeline works as an expanded version of this approach: a bulk energy diversion that hardens the water resilience of the canal by completely removing the most water-consuming cargo class from the locks. The current project grew out of an unsolicited private initiative proposal submitted in November 2024, the author of which has not been disclosed by ACP. Last September, two dozen companies participated in an initial market engagement event held in Panama City.
RFQ submissions for the pipeline are due by July 23rd. The shortlisted companies and the unidentified submitter of the private proposal will begin working with ACP to define the technical and commercial scope of the project, as well as the cost. A final concession will follow and operations are expected to begin in 2029.
The contract is structured as a build-own-operate concession in three phases. ACP retains ownership of the pipeline, terminals and related fixed assets from the start of construction, a return on the expansion contracts. It is anticipated that the actual scope and cost of the project will not be finalized until after qualified consortia are identified.
The model for handling new domains also comes from expansion. “We have very good advisors. We have a good team in the channel and good advisors,” says Espino de Marotta.
The contract deliberately includes an exit for the dealership if financing or commercial commitments fall short. The contingency is a response to late-program cost disputes during the expansion project that taught ACP about leverage and timing.
A couple of new container terminals
ACP has also extended an RFQ for a pair of container terminals: Corozal in the Pacific and Telfers in the Atlantic, which would add approximately 5 million TEU (20-foot equivalent units) of transshipment capacity annually. The contract award is currently scheduled for 2027 and operations are expected to begin in 2029.
ACP and Panamanian officials say the terminals are needed because the five ports near the canal are near capacity, further limiting shipping options.
“We see that Panama is a big transshipment hub,” says Espino de Marotta. “We want to increase capacity for the sake of the country, and we have two perfectly good locations, one in the Atlantic, one in the Pacific, to attract more transshipment to the area.”
An ongoing dispute over the ownership of two ports formerly owned by a Hong Kong-based company also complicates the situation. Both ports currently operate under separate 18-month interim agreements, with resolution of the dispute pending before Panama’s Supreme Court.
The ACP terminal prequalification, due on July 9, is run on a pure pass/fail basis, with all bidders who meet the technical and financial requirements advancing to the next phase without a competitive shortlist. The technical bar is strong: eight years of experience as a terminal operator, six terminals in operation last year and at least 6 million TEU handled in the most recent year.
“We know how to run a canal, we know how to run power generation plants and drinking water plants, but we’ve never managed a port,” says Espino de Marotta. “So it’s very important to us that this experience is an opportunity.”
Other lessons learned are also evident here. The tenders for Corozal and Telfers are structured to prevent one operator from having the two new terminals plus the pipeline. The cross-concession exclusion in the qualification documents, combined with a supply chain diversity rule, indicates that ACP intends for the logistics corridor to be distributed among several different operators rather than vertically integrated under a single supplier. Institutional preference stems from expansion: distributing risk among operators, locking in liability at the consortium leader level, and reserving ACP approval of consortium changes are all responses to the leverage problems that mid-programme consortium reshaping can create.
A new reservoir to meet growing demand
The planned $1.6 billion Río Indio reservoir is key to the canal’s efforts to secure sufficient water resources for its future. The 4,600-hectare (11,370-acre) reservoir would be combined with a transfer tunnel into Lake Gatún, the man-made lake at the heart of the canal route. The reservoir is designed to serve both the canal’s operations and the approximately 2 million Panamanians who depend on the canal’s watershed for drinking water.
The project is still in the phase of geological studies and conceptual design; its environmental impact study formally began last month. ACP is preparing to tender for the project management company that will oversee the design and construction, with a separate construction tender to follow.
The current schedule calls for construction of the reservoir to begin next year, and water for canal operations could begin delivery in 2032.
Illya Espino de Marotta was tasked with coordinating care for residents affected by the planned Río Indio reservoir.
Image courtesy of the Panama Canal Authority
ACP has earmarked $400 million for compensation and resettlement of residents currently living in the watershed. These transfer efforts have been under the responsibility of Espino de Marotta.
“I’m really excited about the resettlement program because it’s a brand new thing,” she says. “How can the quality of life of the 423 families that we have to relocate be improved? A lot of dialogue, a lot of listening, a lot of empathy.”
The ACP board of directors created a resettlement fund and, in another strategy stemming from the successful expansion, the authority has hired experts to integrate with its staff to help manage relocations. Espino de Marotta says the same approach will be needed for the tunneling phase of the project. “This is something we’ve never tried before.”
“Even in the expansion, we had a lot of companies that worked with us that have expertise in areas that we haven’t mastered,” Espino de Marotta says. “They were an integrated team within our team, a mentoring role and ultimately a handoff.”
A look into the future
The vanguard of ACP’s plan aims beyond the next decade of lock and port enforcement.
In the West Bank land corridor, a short container road already runs from PSA’s Pacific Ocean terminal to the Centenario Bridge across the canal. The ACP plans to extend this section to the Atlantic Bridge, which will open an overland route for container trucks to cross the isthmus alongside the existing canal and railway.
Despite its scale, Espino de Marotta is already aiming beyond the current capital plan towards the next strategic frontier.
“We are also looking towards the future of green fuels,” he says. “We could become a green fuel sourcing center in the future. We’re looking at it in the area of sustainability with the port of Algeciras in Spain, and we’re working with the Maersk McKinney Moller Center to visualize what else we can do.”
The acquisition of the gas pipeline already anticipates this potential pivot. Berth designs will accommodate very large ammonia carriers alongside LPG vessels, positioning the corridor to handle ammonia, the primary hydrogen carrier for long-distance shipping.
Asked to describe the broader ambition, Espino de Marotta falls back on a single word. “You become a magnet,” he says. “It’s not just the canal, it’s the country. The country will benefit from more cargo moving through Panama.”
