Trafigura Group Chief Executive Officer Richard Holtum said the liquefied natural gas industry needs a “bit of innovation” when it comes to financing projects.
“I feel sorry for LNG projects in the US,” Holtum said on a panel at the LNG 2026 conference in Doha. “They would only get bank financing when they show that they’ve sold 80%-90% of their volume on long-term projects.”
LNG developers are scrambling to fully finance their projects to export more of the fuel, with the next wave of production from terminals under construction in the US and Qatar due to enter the market over the next decade. In the US, several projects including Delfin LNG off the coast of Louisiana, are working to finalize the debt and equity commitments.
The current approach of LNG financing contrasts with oil, where banks are more comfortable with the inherent value of the commodity, the CEO said.
“Whilst if your project financing some oil exploration, it’s simply the bank takes a view that, okay, oil is worth $40, $50, $60, $70, whatever it is, it doesn’t matter, they take a view, that’s what it’s worth in the long term,” he said.
A similar model for LNG, where project financing is based on a long-term price forecast for the fuel, doesn’t seem to be developing, Holtum said.
Still, global LNG capacity is set to rise by about 50% by the end of the decade — the biggest build-out in the industry’s history — led by the US.
The current arrangement, where 90% of LNG is sold to utilities under long-term contracts, risks running into difficulties because many companies and countries have made net-zero commitments, according to the Trafigura CEO.
“If they have made those commitments, signing a 20-year contract or a 25-year contract that starts in 2030 is inherently problematic,” Holtum said. “And it doesn’t necessarily make a lot of sense to be doing that.”
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