Doha: Experts and senior executives from major global energy companies have called for the adoption of financing models based on "predictability" to counter cost inflation and supply-chain risks, stressing that the liquefied natural gas (LNG) sector is at a pivotal stage that requires moving away from complex structures and returning to fundamentals to ensure the continued flow of investment.
According to Qatar News Agency, participants speaking during a panel discussion held on Wednesday as part of the third day of the 21st International Conference and Exhibition on Liquefied Natural Gas (LNG2026) in Doha, titled "Fuelling the Future: Navigating the Evolving Landscape of LNG Project Financing," agreed that the financial community is no longer seeking excitement in projects, but rather favors those that provide certainty regarding timelines and delivery schedules.
Panelists representing Woodside Energy, Bechtel Energy, JERA, and the Japan Bank for International Cooperation (JBIC) explained that predictability in performance and start-up dates has become the most valuable currency in today's markets, particularly following the wave of massive investments witnessed last year.
They noted that the industry is facing mounting challenges, including persistent inflationary pressures, intense competition for skilled labor, and supply-chain disruptions that have yet to fully recover. They warned that these factors have made it increasingly difficult to rely on traditional fixed-price engineering contracts that place the full burden of risk on contractors, pointing out that such practices in US Gulf Coast projects valued at between $15 billion and $20 billion have led to bankruptcies and project distress. Instead, they emphasized the need to "return to basics" through precise scope definition prior to final investment decisions and by replicating proven models to reduce surprises and ensure cost viability.
The concept of "strategic partnerships" emerged as a central pillar of the sector's future outlook. Industry leaders stressed that success amid geopolitical uncertainty and price volatility requires strong, flexible alliances that go beyond merely signing sales and purchase agreements. They clarified that risk management does not mean simply shifting or "reshuffling" risks among parties, but rather engaging in mature dialogue to identify which party is best equipped to manage each type of risk. A growing trend among some developers toward financing projects through their balance sheets was also highlighted, as a means of gaining greater flexibility with customers and retaining control over project outcomes away from the constraints of traditional financing structures.
The session also shed light on operational risks that are often overlooked, particularly in the shipping segment, which accounts for roughly one-third of total project costs. Experts cautioned that current shipyard capacity may be insufficient to accommodate the large volumes expected to flow from the United States to Asian markets, especially given long shipping routes and emerging technological and environmental challenges. They emphasized that securing the future of the sector requires a delicate balance between operational reliability, affordability for end-consumers in emerging markets, and the reduction of carbon emissions.
On financing models, discussions underscored the growing importance of shifting toward balance-sheet financing by major corporations as a strategic alternative to conventional project finance. This approach allows developers greater control over their assets and helps them avoid the rigid constraints of long-term contractual structures. It also enables more flexible commercial terms tailored to customers' needs and accelerates final investment decisions, enhancing competitiveness in a market characterized by rapid change and shifting global supply-demand dynamics.
Regarding operational efficiency, participants stressed that focusing on early, mature partnerships between developers and contractors ensures a shared understanding of risks before execution begins, sparing the sector the disastrous consequences of tenders driven solely by the lowest price at the expense of precise scope definition and delivery reliability.
As for demand sustainability, the panel concluded that the future of LNG hinges on affordability in emerging Asian markets, which requires a careful balance between production policies and end-user needs. Amid rising pressures from shipping costs and the impact of divergent government policies, it has become essential to broaden investment to include downstream infrastructure and diversify geographic portfolios to prevent these markets from reverting to less sustainable energy sources, while ensuring reliable energy flows at globally competitive prices.