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Leading bunker company OW Bunker has announced that it has expanded its operations in Panama to offer bunker deliveries in both Cristobal (Atlantic) and Balboa (Pacific).

Commenting on the news, OW Bunker said "Operating in a system of both physical supply and trading activities, O.W. Bunker is cooperating with reliable barge operators and physical suppliers to sustain the flow of bunkers."

OW Bunker said that it was able to organize the supply of marine fuel in Panama by barge and ex-pipe and that IFO 380 and marine gas oil (MGO) were the main products being delivered.

News of OW Bunker's expanded operations follows the announcement earlier this year by rival bunker supplier and trader Bominflot that it has expanded its delivery capability to the Atlantic side of the Panama Canal, with bunkering services now being offered at Cristobal.

"This move complements our existing services at Balboa, and enables us to supply a full range of marine fuel grades on either side of the Isthmus," the company said in a statement in April.

Last year US oil major Chevron announced that it would be doubling its storage capacity in Las Minas, Panama, to 4 million barrels in order to meet growing demand in the region.

The Las Minas facility, which is located near the port city of Colón, is used to store product for the supply of bunker fuel and lubricants to ships transitting the Panama Canal and calling at ports nearby. It also includes a refinery, which is reported to have a refining capacity of approximately 60,000 barrels per day.

Panama has the highest oil terminal costs in the world and inadequate storage capacity has been a long-term issue in Panama. The limited capacity in the country has also lead to bunker fuel being sometimes moved through the Canal to meet temporary shortages at Balboa or Cristobal.

US firm Chemoil Energy Ltd is currently the market leader in Panama, reportedly taking approximately 40 percent of bunker sales in the country. Chevron is the second-largest supplier with a market share of around 20 percent. Other leading players in the Panama market include CEPSA Panama S.A. and ExxonMobil Marine Fuels Ltd.

The recent expansion of operations in Panama for Bominflot and OW Bunker follows reports of significant cargo volume growth in recent months. At the start of the year Cristobal - operated by Panama Ports Company (PPC) - saw cargo volumes skyrocket 108 percent from 12,274 twenty-foot equivalent units (TEUs) in January 2008 to 25,529 TEUs in January 2009.

Meanwhile, two new transfer terminals are also currently under construction and a total of three oil terminal projects are at an advanced stage, which will lead to storage capacity being substantially expanded.