If you think shipping LPG is just about catching the next freight rate spike, think again. The industry's biggest players are increasingly focused on structural shifts in global energy markets that have nothing to do with what freight rates did this morning.

During a recent Capital Link shipping sector webinar, three CEOs laid out why the fundamentals of liquefied petroleum gas shipping are being driven by long-term trends in energy production and petrochemical demand, not the daily drama of freight volatility. The panel featured Kristian Sorensen, CEO of BW LPG Ltd. (BWLP), Theodore Young, CFO and Treasurer of Dorian LPG Ltd. (LPG), and Mads Peter Zacho, CEO of Navigator Gas (NVGS). Chris Robertson, Vice President of LNG Infrastructure and Maritime Shipping at Deutsche Bank Securities, moderated the discussion.

The Big Picture: Shale Gas, Asia, and Growing Demand

BW LPG is the largest owner-operator in the VLGC (very large gas carrier) sector, specializing in vessels over 84,000 cubic meters. Dorian LPG, as Young explained, operates exclusively in the VLGC space with 27 vessels. Both companies primarily handle long-haul propane and butane trades from the U.S. Gulf and Middle East to Asia.

Navigator Gas operates in the handy and midsize segments and owns the world's largest fleet of handysize liquefied gas carriers. The company transports LPG, ammonia, and petrochemical gases including ethylene and ethane, with a fleet of 57 semi- or fully-refrigerated vessels, 27 of which are ethylene-capable. Navigator also holds a 50% ownership stake in an ethylene export marine terminal at Morgan's Point, Texas.

Here's where it gets interesting for long-term demand: LPG production keeps growing even as U.S. crude output flattens. The panelists noted that maturing shale basins like the Permian remain persistently gassy, meaning NGL (natural gas liquids) production is forecast to increase by 25-32% by 2030 regardless of what happens with oil drilling.

Beyond pure volume growth, LPG is gaining traction as a marine fuel itself. Companies like BW LPG are adopting dual-fuel propulsion for new vessels. Meanwhile, the consolidation of naphtha-based petrochemical capacity in Europe is actually positive for the sector, as Young pointed out. Replacement capacity in Asia tends to be more LPG-intensive, which increases ton-mile demand (the industry's favorite metric for measuring shipping work).

Dividends Beat Buybacks, Apparently

When it comes to returning cash to shareholders, both Sorensen and Young emphasized dividends as their primary tool. Young shared some candid corporate finance lessons from Dorian's experience testing different approaches.

"We've managed to strike a pretty good balance between debt reduction, fleet investment, and shareholder returns," Young said. "We really saw no measurable impact on our total shareholder return when we did meaningful buybacks, yet we saw a massive increase when we actually started paying dividends."

That's the kind of real-world feedback you don't always get from finance textbooks, which generally treat dividends and buybacks as theoretically equivalent.

Zacho highlighted Navigator Gas' recently improved capital return policy, which raised the quarterly cash dividend to $0.07 per share from $0.05 per share and increased the net income payout percentage to 30% from 25%. The company has also repurchased an additional $50 million of shares for three consecutive years, and Zacho noted that this pattern of ad hoc share repurchases will likely continue in 2026.

Orderbooks, Aging Fleets, and Environmental Pressures

For VLGCs, Young acknowledged a 25% orderbook-to-fleet ratio, which sounds concerning until you consider that demand growth is strong and the global fleet is aging. Balance matters more than any single number.

For Navigator Gas' segment, Zacho saw a relatively benign orderbook of about 10%, with potential for negative fleet growth due to scrapping since more than 20% of existing vessels exceed 20 years of age. That's the kind of fleet dynamic that can support healthy rates even without explosive demand growth.

Environmental regulations are accelerating change. The impending ban on scrubber discharges is pushing the industry away from sulfur scrubbers and toward cleaner solutions. Sorensen said that BW LPG is "tilting our fleet composition more and more toward LPG dual fuels."

Zacho agreed: "We are building dual-fuel vessels. We haven't considered scrubbers for a long time. It's probably better if the refinery is there removing the sulfur rather than if we do it on each ship."

Young added that while existing scrubber investments had vastly exceeded internal calculations, the future clearly lies in alternative fuels, making scrubbers a fading solution.

The big takeaway is that LPG shipping is becoming less about betting on quarterly freight swings and more about positioning for structural changes in energy flows, environmental regulations, and fleet composition. Sometimes the boring fundamentals turn out to be the most interesting story.

Disclosure: Capital Link is the investor relations advisor to Navigator Gas (NVGS) and works with Dorian LPG (LPG). This content is for informational purposes only and not intended to be investing advice. The article includes statements made by company management during the sector webinar.