Geopolitical turmoil in the Middle East and related market disruptions are shifting the shipping strategy of liquefied natural gas (LNG) exporters toward longer-term vessel charters, according to a senior shipping executive at NextDecade speaking at an industry event in Houston.
Peter Fitzpatrick, NextDecade's vice president for shipping, said the LNG sector had grown accustomed to sourcing vessels on the spot market during a period of oversupply, with very few long-term charter agreements concluded in 2024 and 2025. That environment, he said, is changing as the market recognizes an uptick in volatility and begins to adapt its risk-management approach.
"The long-term impact of the geopolitical crisis is that we will see more long-term shipping where you manage your own risk and not rely only on the spot market," Fitzpatrick said during remarks at Lloyd's Register's Global LNG Forum.
Fitzpatrick also flagged non-geopolitical bottlenecks that are weighing on project timelines. In particular, he pointed to supply chain difficulties in sourcing gas turbines, a key piece of equipment for many U.S. LNG projects. Those constraints, he said, are complicating the timing and certainty around final investment decisions (FIDs), because developers cannot reliably predict when turbines will be delivered.
"There was a time when gas turbines were mainly for plants like LNG, but with the amount of data centers being built and the LNG expansion it is very challenging to get gas turbines," Fitzpatrick said on the sidelines of the conference.
He added that resistance in Europe to committing to long-term LNG purchases is another factor making FIDs harder for some U.S. developers. Persistently high interest rates were also cited as a hurdle, as they increase financing costs and overall project economics.
At the same event, Patrice Brossard, general manager of Gaztransport & Technigaz North America, said the shipping sector is preparing to scale up significantly in response to export growth. She said the industry is on track to build roughly 100 carriers per year, and that next-generation vessels are expected to carry up to 15% more cargo than many current tankers.
The expansion in shipping capacity is tied to demand growth and planned export increases. The United States, already the world's largest LNG exporter, is projected to roughly double its export capacity by 2030. NextDecade is among the developers expanding output and is constructing a 30 million metric ton per annum export facility in Brownsville, Texas.
Context and implications
For producers and project developers, the combination of geopolitical risk, equipment lead times, buyer hesitancy in certain regions, and elevated financing costs is reshaping decisions on how to secure logistics and when to proceed with investments. For the shipping industry, faster shipbuilding and modest gains in per-vessel capacity reflect an effort to accommodate a larger global LNG trade.