Here's an interesting problem: the world is about to produce a lot more liquefied natural gas, but we might not have enough ships to move it around. That was the central theme of a recent Capital Link shipping sector webinar featuring executives from Capital Clean Energy Carriers Corp. (CCEC), Flex LNG Ltd. (FLNG), Golar LNG (GLNG), and Maran Gas Maritime Inc.

The discussion, led by Michael Webber, CFA, Managing Partner of Energy Infrastructure at Webber Research & Advisory, brought together Jerry Kalogiratos, CEO of Capital Clean Energy Carriers, Knut Traaholt, CFO of Flex LNG, Karl Fredrik Staubo, CEO of Golar LNG, and Spyros Leoussis, CCO of Maran Gas Maritime. These executives explored current market trends, shipping demand dynamics, and the structural challenges facing the sector as it prepares for unprecedented growth.

America Takes Over

The numbers tell a pretty stark story. The global LNG market currently sits at roughly 430 million tonnes per annum. Over the next five years, that's expected to grow by approximately 200 million tonnes, a nearly 50% jump. The kicker? About 65% of that new supply is coming from the United States.

Staubo characterized this as a fundamental market transformation. The industry is moving "from one driven primarily by demand to one that will increasingly be shaped by international LNG prices, with the U.S. emerging as the marginal producer." In other words, American producers will increasingly set the floor for global pricing.

This shift is already driving strategic decisions. Golar recently sold 2 million tonnes of LNG from an Argentine project to Germany's SEFE, a move that reflects buyers' growing interest in diversifying away from U.S.-sourced supply. Geographic diversification isn't just a nice-to-have anymore; it's becoming a deliberate hedging strategy.

Not Enough Boats

The panel reached clear consensus on one point: there's going to be a shortage of LNG carriers starting around 2027-2028. Kalogiratos emphasized that LNG shipping is essentially price-agnostic, functioning as a floating pipeline where demand is driven by volumes rather than commodity prices. When you're adding this much production capacity, the math on vessel requirements gets pretty straightforward.

Leoussis pointed out that charterers are already trying to lock in tonnage for 2028-2029, though he cautioned that current contracting represents "only a fraction of the capacity that will ultimately be required." The market knows what's coming, but the response hasn't matched the scale of the problem yet.

Kalogiratos expects a significant portion of 2029 capacity to be committed within the first half of 2026. Traaholt noted that shipyards and technology providers like GTT have strong incentives to keep prices elevated given the visible demand pipeline. When everyone can see the shortage coming, prices tend to reflect that reality pretty quickly.

Geopolitical Wild Cards

Several geopolitical factors could reshape trade flows in meaningful ways. The big one is U.S.-China relations. "China will be a big factor for LNG," Leoussis stated, pointing to China's aggressive regasification infrastructure build-out. A trade war or export restrictions targeting Chinese buyers would have major implications for shipping patterns and vessel demand.

Interestingly, Traaholt suggested that a resolution to the Ukraine conflict could actually benefit LNG shipping by unlocking new Russian liquefaction projects that would need vessels. One person's geopolitical risk is another's market opportunity.

Kalogiratos emphasized that a sustained return of Chinese demand could be transformative. In that scenario, LNG carrier requirements could nearly double almost immediately. The implied multiplier effect is substantial when you're talking about serving the world's largest energy market.

A Different Kind of Cycle

The coming shipping cycle looks structurally different from previous ones. There's a significant volume of merchant LNG capacity coming online without long-term off-take agreements already in place. According to Kalogiratos, this means more short-term volatility in freight rates as uncommitted volumes chase market opportunities.

Leoussis expects this environment to favor medium-term charter structures, typically two to five years, rather than traditional long-term agreements. Players without specific long-term sale and purchase agreements will want flexibility. "If those cargoes still come to the market, we're still picking them up," Kalogiratos added, suggesting that vessel owners are comfortable with this more dynamic market structure.

On the question of speculative newbuilding orders, there's some divergence among operators. Both Leoussis and Kalogiratos indicated their companies regularly order vessels speculatively. Traaholt took a more cautious view, citing the substantial capital commitments and the risk that new vessels could compete with a company's existing fleet as those contracts roll off.

The bottom line: LNG production is ramping up dramatically, but the infrastructure to move all that gas around the world is struggling to keep pace. For shipping companies, that's opportunity. For LNG buyers and producers, it's a potential bottleneck that could reshape how the market functions. And for investors watching this space, the next few years should be interesting as supply growth collides with carrier constraints.

Disclosure: Capital Link is the investor relations advisor to Capital Clean Energy Carriers Corp.. 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.