When it opened to great fanfare in 1914, the Panama Canal revolutionized the global trade of oil, raw materials and manufactured goods by allowing ships to cross between the Atlantic and the Pacific without navigating round the "sailors' graveyard" of Cape Horn.

Since then, both the volume of cargo traded globally and the size of the vessels needed to carry it have ballooned. Nicaragua's ambitious, Chinese-financed vision of its own "Gran Canal" attempts to answer the need for a trans-ocean waterway that will cater to a new breed of supertanker. Described as the biggest civil engineering project in history, some doubt it will ever see completion.

But how might the new waterway impact the global trade of both oil and LNG?

When oil was first produced commercially in the 19th century, transportation was an urgent riddle to be solved. In response, the Swedish Nobel brothers launched the world's first modern tanker, the Zaroaster, in 1878 in Azerbaijan's Caspian Sea. For the first time, oil was pumped directly into the ship's hull.

The innovation was soon taken up and improved upon globally. Until then, the U.S. had been shipping its own oil across the Atlantic somewhat treacherously in leaky, old whiskey barrels loaded onto barges.

The Zaroaster was 56 meters long and 8 meters wide. Of course, the vessels that ply the Panama Canal today are on a different scale. "Panamax" is the term used for vessels that are small enough to squeeze through the locks of the pre-expansion Panama Canal.

The size of these ships is limited by the width and length of lock chambers, the depth of the water in the canal and, since 1962, the height of the Bridge of the Americas. Since the canal opened, shipbuilders have been producing made-to-measure ships that fit these criteria.

But ships are simply getting bigger. And bigger. As global trade volumes have rocketed, we have entered a "post-Panamax" world. Today's ships carry volumes of up to 8,000 20-foot equivalent units (TEU), compared to a maximum of 5,000 for Panamax vessels.

These larger ships now make up 16 percent of the world's container fleet (projected to be 62 percent by 2030) and carry 45 percent of the cargo. The Triple E, one of the newest classes of container ship, is taller than London's Olympic stadium.

The latest expansion of the Panama Canal has been in progress since 2007 and has cost $5.25 billion, but the canal authorities are struggling to keep up with the expanding waistlines of modern cargo ships. The Triple E certainly cannot make it through, despite the expensive expansion.

The Nicaragua Canal, officially known as the "Great Inter-Oceanic Nicaragua Waterway Canal," seeks to outdo Panama. It will take 11 years to build at a cost of $40 billion and will stretch for 130 miles, three times longer than the 48-mile channel across the narrower Panamanian isthmus. More importantly, it will be both broader and deeper than its southern competitor, allowing bigger ships to pass.

Image: NPR

The new canal will cater to the world's largest oil and LNG carriers, accommodating VLCCs (very large crude carriers), ULCC (ultra-large crude carriers) and VLGCs (very large gas carriers), which Panama still cannot accept.

One of most enticing prospects for the U.S. is the canal's LNG transport potential. As the debate around U.S. oil and gas exports develops, we are seeing a steady trickle of projects granted permission to export, including Gulf Coast LNG projects such as Sabine Pass in Texas. Much of this gas will be destined for Asian markets, many of which import the majority of their energy.

LNG tankers in particular need to be big. They are double-hulled for safety and specifically designed to handle the liquefied gas, which must be chilled to at least minus-150 degrees C (minus-238 F) for transport.

The first LNG tanker, the Methane Pioneer, sailed in 1959, but the volume of global LNG trade has accelerated since the mid-1970s from 13 billion cubic meter (bcm) to 325 bcm in 2014. Prior to its recent expansion, virtually no LNG tankers were able to pass down the Panama Canal.

Building the Gran Canal would provide more scope for LNG exports, but it's no easy feat.

There has been fierce domestic criticism of the project, not only over the environmental damage (there are fears it may cause damage to wetlands, nature reserves and the ecosystems of Lake Nicaragua) but also over the project's commercial viability. It has been pointed out that Chinese telecom billionaire Wang Jing, who is behind the company building the canal — HKND — lacks experience in large infrastructure projects.

But perhaps this project has more to do with geopolitics than economics. It is certainly emblematic of great power shifts over the 20th century.

The British flexed their geostrategic muscles 150 years ago by carving a trading route between Europe and Asia in the form of the Suez Canal. Fifty years later, Theodore Roosevelt consolidated U.S. strategic interests by connecting the Atlantic and the Pacific oceans with the Panama Canal. A century later, it is now the turn for the Chinese to make their own grand political gesture.