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NextDecade sees Middle East conflict boosting long-term LNG ship charters

Peter Fitzpatrick, NextDecade Shipping Vice President and speaker at an event held in Houston on Wednesday, said that the ongoing conflict in the Middle East will cause more companies to hire LNG ships on long-term contracts as opposed to the spot market.

Fitzpatrick stated that the LNG industry was comfortable hiring ships on the spot markets when there were oversupplies of the fuel. Very few "long-term" deals were made in 2024 or 2025. Fitzpatrick said that the market is adapting to increased volatility, as it is becoming aware of its existence.

"The geopolitical crises will have a long-term effect on shipping, as we'll see more long-term contracts where you can manage your own risks and not just rely on the spot markets," said Fitzpatrick at the Global LNG Forum hosted by Lloyd's Register.

The difficulty in determining when the equipment would be available will hinder the ability of U.S. developers to make investment decisions.

Fitzpatrick said on the'sidelines of the conference that it was difficult to obtain gas turbines because of the number of data centers and LNG expansion being built.

He added that European resistance to long term purchases is also making FID difficult for some U.S. developers.

Patrice 'Brossard, general manager of Gaztransport & Technigaz North America, said that the industry was on track to build up to 100 carriers a year. The new ships can carry up to 15% more cargo than the current tankers.

The United States is already the largest LNG exporter in the world. Its capacity to export LNG will double by 2030. NextDecade will build a 30,000,000 metric ton export facility in Brownsville. Curtis Williams, Houston Reporter; Nathan Crooks and Kirsty Donovan, Editors

(source: Reuters)