LNG COMMERCIAL ADVISORY
AND SHIPPING SERVICES
Fidartis combines advisory capability with practical experience in LNG marketing, trading, chartering, commercial shipping and cargo operations.
We support clients from project conception, through contracts negotiation, hands-on commercial and operational execution, to optimization.
We bridge the gap between high-level strategy and daily operations.
- Market-entry and expansion strategy.
- Business model development.
- Design of LNG marketing and trading division, definition of roles, responsibilities.
- Set up of governance, decision-making processes, required policies and procedures
- Development of commercial frameworks, procedures, and controls.
- Integration of LNG activities into a wider organization.
- Establishment of commercial shipping and operations functions.
- Definition of the appropriate organization, staffing model, and expertise.
- Setting up of operational interfaces between trading, shipping, and internal functions.
- Review of shipping commercial structures and obligations across the value chain.
- Identification of efficiency improvements, cost reductions, and resilience measures.
- Origination of LNG supply, sales, and shipping capacity deals.
- Development of transaction concepts and commercial structures.
- Analysis of value drivers, risks, obligations, and execution requirements.
- Support in preparing negotiation strategies.
- Counterparty and market-context assessment.
- Guidance throughout the negotiation and execution process.
We help clients:
- Assess the commercial viability of proposed agreements.
- Identify unbalanced rights and obligations.
- Review flexibility, volume, destination, delivery, and scheduling provisions.
- Identify operational dependencies and potential execution challenges.
- Highlight vulnerabilities, cost exposures, and sources of risk.
Where it is the preference of the client, Fidartis remains involved beyond the advisory work.
We provide practical implementation and follow-up support as clients establish or improve their LNG activities.
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New LNG market entrants establishing trading & logistics -
LNG project developers structuring commercial & shipping agreements -
National oil & gas companies building operational and merchant capability -
Financial institutions and investors requiring LNG commercial, market and transaction advisory -
Established LNG portfolio players seeking temporary cover for operational roles -
Utilities and specialised service providers developing or expanding their LNG business capabilities
LNG shipping is central for trading flexibility required to both buyers and sellers
The LNG industry was traditionally built on long-term stability, stable supply-purchase agreements, fixed routes and specific ports. For decades, this "point-to-point" model provided predictability for both buyers and sellers.
Today’s LNG market is not as simple. New players enter the field, the market is becoming more complicated, buyers (both old and new) seek diversion optionality via more flexible DES supply or through FOB contracts. Main drivers here are greater commercial value and operational flexibility.
In turn, sellers, are adapting just as quickly. Instead of only selling FOB, they seek to offer DES supply and in exchange for granting destination flexibility moving away from the "single source supply" constraint. By offering non-source specific DES deliveries with intra-regional flexibility, they can provide a more competitive product to a broader client base, whilst optimising their own supply portfolios.
Effective shipping is the common thread in both scenarios but, without expertise in LNG shipping, the complexity that comes as a result of this increased flexibility can turn into greater operational and financial risk.
Up until now companies have had little alternative to building this expertise in-house, an activity which is time consuming, costly and requires considerable management effort. What if all or part of the shipping function could be outsourced to an organisation that's sole purpose is to provide quality end-to-end shipping services to LNG clients?
The Expertise Bottleneck: The Hidden Risk in LNG's Next Growth Phase
A Decade of Transformation (2016-2026)
Over the past decade, the global LNG sector has undergone a profound shift. The scale of change is striking:
- Production volume: Output has nearly doubled from 255 to 470 mtpa and is forecast to reach 600 mtpa by 2030.
- Market penetration: The number of importing countries has risen from 34 to 48, an increase of almost 40%.
- Market structure: The share of spot trading has expanded from 15% to nearly 40%, reflecting a growing appetite for flexibility and real-time optimization.
- Shipping capacity: The global LNG fleet has grown from 420 to 740 vessels, with a further 290+ currently on order.
The shift in market dynamics
LNG market expansion is being shaped by two parallel evolutions: a) surge in new participants, and b) fundamental change in how the market trades.
On the supply side, production growth is driven largely by new volumes from the Americas. Traditional FOB contracts or tolling models are still the base, but slowly giving way to DES contracts, enabling sellers to diversify their customer base and capture more value.
On the demand side, especially since 2022, energy security has brought new buyers to the table. Utilities and industrial players now want direct access to supply, often with greater destination flexibility built into contracts.
The expertise bottleneck
Direct DES sales for sellers, or procurement on FOB basis with complex delivery schemes for buyers, both require deep expertise in shipping and commercial optimization. As the market expands, both new and established players face a talent bottleneck, a shortage of professionals who can master the operational and contractual intricacies of LNG shipping.
Often companies try to close this gap either by developing talent internally or through headhunting. But there is also a third path, which may be more efficient and reliable.
Independent service provider with specialized expertise
Instead of building in-house shipping and logistics optimization capabilities, companies can leverage independent LNG shipping service provider with team that has required depth of experience to manage aggregated shipping portfolios efficiently and in best interests of the customer. This frees LNG market participants to focus on growing their portfolio and maximizing extrinsic value of trade, while specialists ensure cargoes are shipped in the most optimal way.
How IFRS16 and high interest rates affect the LNG ship chartering approach
Pre-2019: The Era of Easy Money
Before IFRS16 took effect in 2019 and throughout the prior decade with historically low interest rates, for many LNG players, the burden on the balance sheet was relatively light. Time charters were the default solution to meet LNG shipping needs. With cheap liquidity, adding vessels onto their own books felt manageable, and companies grew accustomed to carrying these liabilities at a relatively low cost and without the need to reflect time charters on their balance sheets.
2026: The Current Situation
Today's landscape is very different, with the need (under IFR16) to reflect a company’s long-term leases on its balance sheet, long-term charter agreements are more comparable to purchasing a vessel outright. When compared to pre-2019, the adverse changes can be summarised as:
- IFRS16 in force: Medium and long-term time charters must now appear as a right of use (“ROU”) asset with the corresponding lease liabilities shown on the charterers balance sheets. Compared to pre-IFRS16 accounting treatment, the gearing (or leverage) ratio increases and return on assets (ROA) reduces. The changes to these accounting metrics, makes a company look less attractive to investors, financial analysts and credit rating agencies.
- Higher vessel costs: Newbuild LNG vessels will average $250M in 2026, an increase from an average of under $200M during 2015–2022. Long-term leases will inflate to reflect these higher build costs.
- Debt service costs : Since 2019, interest rates have increased, resulting in an increase working capital costs as well as the costs of serving debt.
- Liquidity crunch: Market volatility (particularly in commodities), increases value at risk (VAR) further places a greater strain on working capital.
As a result of these combined effects, LNG charterers, particularly their CEOs, CFOs and treasurers are now more focused on balance sheet health and their key question when it comes to LNG shipping is: ”Are there alternative ways to secure shipping coverage, on a term basis, with minimal balance sheet impact?”
At Fidartis, we know the answer is “Yes”.
All LNG shipping needs covered within one comprehensive service contract
Why manage numerous LNG shipping-related contracts when a single service agreement can cover all your transportation needs end-to-end?
When a company charters an LNG vessel, it may seem like a straightforward logistics step: secure the ship, move the cargo, complete the delivery. In reality, it means entering a complex framework of contractual, operational, and risk-management obligations.
Even a minimal LNG shipping setup requires a broad network of supporting agreements: with port agents, terminal service providers, inspectors, vetting and quality assurance firms, IT and reporting vendors, local operational counterparties and so on. What appears to be a single vessel on charter can quickly translate into 15–20 active contractual relationships.
This is where an integrated LNG shipping service changes the equation. By engaging an independent, experienced LNG commercial operator, the complexity doesn’t disappear, it is transferred to a specialist already equipped to manage it. Instead of maintaining dozens of interfaces, the client operates under a single service agreement covering the full scope of shipping activities.
Operational continuity, staffing, documentation discipline, and day-to-day execution risk are handled externally. The result: more focus, fewer distractions, and resources freed up for core business activities.
Building in-house shipping capability is not just about hiring, it requires a 24/7 operating platform, systems, procedures, and specialized expertise that typically take years to develop. This matters most at the early stage of an LNG business and for companies with a relatively limited initial portfolio size.
The question is simple: do you want to have a burden of building everything in-house and managing number of LNG shipping related contracts, or would you rather rely on a capable partner to manage your LNG shipping end-to-end under one service agreement?
The Challenges of Building an In-House LNG Shipping Department
Bringing LNG shipping in-house can create real commercial value. It can give an LNG company greater control over vessel chartering, nominations, scheduling and voyage management, improving flexibility, operational control and the ability to optimise.
However, establishing an LNG shipping department is not simply a matter of hiring a few shipping specialists. It requires the company to build new capabilities, establish and integrate new processes, enter into unfamiliar contractual relationships, assume additional operational risks and support shipping activities around the clock.
Before embarking on such a project, companies should consider five major challenges.
1. Expertise
The first and perhaps most obvious challenge is finding the right people. However, the requirement goes beyond hiring professionals with LNG shipping experience. The company needs people who understand the end-to-end shipping process and, crucially, can build the required operating capability from the ground up.
The new department will need procedures covering:
- Vessel chartering and nomination
- Scheduling and voyage management
- Port and terminal operations
- Bunkering
- Agency services
- Vessel vetting
- Ship-shore compatibility
- Claims management
- Voyage accounting
- Performance monitoring
These processes cannot operate in isolation. They must be integrated with the company’s existing trading, scheduling, legal, risk, finance, operations and supply functions. The challenge is therefore not only to create new shipping processes, but also to ensure that they are compatible with the wider organisation.
There is also an important operational consideration: LNG shipping is a 24/7 activity. Weather disruptions, port delays, technical issues, canal restrictions, bunkering problems and other operational events can arise at any time. An in-house function therefore requires sufficient coverage, clear escalation procedures and access to decision-makers outside normal office hours.
The organisation must also develop an appropriate level of technical and legal knowledge. Even when experienced brokers, lawyers and consultants are involved, the internal team must be capable of understanding and challenging the advice it receives. Take vessel chartering as an example. A broker may provide a shortlist of available vessels, but the charterer still needs to understand the technical differences between them and how those differences affect each vessel’s suitability for a particular cargo, route or terminal.
Finally, shipping must be integrated into the broader LNG scheduling and optimisation process. It is not enough to optimise only the cargo side of a transaction—the vessel becomes another variable in the equation. For example, when buying LNG on an FOB basis and selling it on a DES basis, the company may need to consider vessel positioning, voyage duration, terminal compatibility, heel management, boil-off, scheduling constraints and cargo-quality implications. The shipping team must therefore work closely with trading and scheduling rather than operate as a separate back-office function.
2. Extended contractual relationships
An in-house LNG shipping department depends on a network of external counterparties and service providers. Depending on the chosen operating model, these may include:
- Shipbrokers
- Vessel-vetting providers
- Port and hub agents
- Bunker suppliers
- Technical service providers
- Surveyors and inspectors
- Maritime lawyers
Establishing these relationships takes time and requires contractual expertise. More importantly, the company must understand exactly which responsibilities and liabilities it is assuming under each agreement. This becomes particularly important when a company moves from being primarily a cargo owner or trader to taking an active role as a charterer.
The allocation of responsibility for delays, technical deficiencies, port operations, bunkering, environmental incidents, cargo quality, demurrage and other operational events must be clearly understood before the first vessel is fixed or nominated.
Specialist legal support is therefore essential. The organisation must understand not only the commercial terms of its contracts, but also the maritime responsibilities and potential liabilities associated with its role as charterer.
Regulation adds another layer of complexity. Environmental requirements, emissions rules and wider maritime regulations continue to evolve. An in-house department must be able not only to comply with current requirements, but also to monitor regulatory developments and adapt its processes accordingly.
3. An expanded risk profile
Bringing shipping activities in-house inevitably changes the company’s risk profile, an implication that is sometimes underestimated.
The company may become exposed to new or increased risks relating to:
- Cargo operations
- Bunkering
- Environmental incidents
- Vessel performance and operational disruption
- Charter-party obligations
- Claims, disputes and demurrage
- Regulatory compliance
- Financial consequences arising from operational decisions
This creates a need for stronger quality assurance, governance and operational control. Processes must be robust enough to ensure that the company operates safely, consistently and in accordance with contractual, regulatory and industry best practice requirements.
Before launching an in-house shipping function, management must be comfortable with the additional risks being assumed. It should also ensure that the organisation has the necessary governance, controls, escalation procedures and expertise to manage those risks effectively.
4. Implementation time
Another major challenge is understanding how long the project will take. Establishing a shipping department involves numerous stakeholders, dependencies and approval processes. Even when the target operating model is clear, internal alignment and approval can take considerable time. In some organisations, putting all the required capabilities, processes and approvals in place may take more than a year. This is particularly important when the project is linked to a commercial opportunity with a fixed deadline.
A realistic implementation plan must allow sufficient time for:
- Designing the target operating model
- Securing internal alignment and approvals
- Recruiting and training the team
- Developing and integrating procedures
- Establishing external relationships
- Negotiating contracts
- Implementing necessary controls
- Testing the model before launch
- The implementation timeline should be driven by operational readiness, not only by the targeted date of the first transaction.
5. The cost
Finally, there is the question of cost. An in-house shipping department requires investment before it begins to generate value. A robust financial model is therefore essential, not only to assess the economics, but also to present and defend the business case internally. Building that model requires a clear understanding of both the cost base and the assumptions behind it.
The plan may need to cover following costs:
- Personnel and training
- Charter hire
- Bunkering
- External legal, technical and advisory support
- Systems, data and communications
- Insurance
- Regulatory compliance
6. Conclusion
Establishing an in-house LNG shipping department is much more than an organisational change. It means building a new operating capability that combines LNG trading, maritime operations, technical and legal expertise, risk management and 24/7 execution.
The five challenges: expertise, new contracts, new risk, time and cost are closely interconnected. They must therefore be addressed as part of one coherent operating model rather than as separate workstreams.
Whether a company is considering a fully in-house shipping function or needs support with a specific element of its operating model, the Fidartis team can provide both advisory and practical assistance, from process and organisational design to contracts, risk management, scheduling and operations and financial modelling.
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Taimuraz Badtiev has over 20 years of experience in oil and LNG trading and shipping, holding senior commercial roles with leading industry players across the Far East, Middle East, and Europe. He has been instrumental in establishing and shaping LNG commercial functions at integrated producing projects, a European utility, a major global bank, and an largest independent shipbroking house.
Over his career, Taimuraz has concluded and managed LNG supply and shipping contracts, ranging from short to long term and totalling well over 5 billion USD in value. He also pioneered early LNG shipping optimisation practices and played a key role in launching the LNG time charter party framework that has since become widely adopted across the market.
Most recently, he established and led the LNG business for EnBW, Germany’s third-largest utility, successfully building it from the ground up.
Taimuraz holds an MSc in Energy, Trade and Finance from Bayes Business School (formerly Cass Business School) and an Executive MBA from London Business School.
After several roles in power project development, on behalf of BP, Sam led to conclusion the LNG supply arrangements for the first independent integrated LNG re-gasification and power generation facility (BBE-BBG) to be developed in Europe resulting in the launch of Atlantic Train 2.
Subsequently, he assumed numerous lead commercial roles for both the Egypt LNG Damietta project and Atlantic LNG. On behalf of the North West Shelf (NWS) venture he led all price review activity successfully concluding numerous long-term contract re-negotiations. He subsequently led the NWS short-term sales activities, extending market reach, orchestrating a number of new mid-term sales campaigns, which collectively resulted in incremental sales of over 15 million tonnes.
More recently Sam, developed and implemented the roll out of Angola LNG’s first term sales campaign, implemented to mitigate the risks and exposure of the spot LNG market. Successfully negotiated Angola LNG’s first mid-term Sales & Purchase Agreement and subsequently went on to lead and conclude the majority of all of Angola LNG mid-term sales.
Alina also brings strong experience in maritime event management, having developed and led 15 international conferences and forums for shipowners, LNG and crude oil buyers, and senior industry leaders, enhancing corporate visibility and stakeholder engagement.
Alina holds an MSc in Maritime and Shipping Management, the Law of the Sea, and Asian Studies, along with professional certifications in logistics, maritime law, chartering, HSE, and Continuous Improvement from institutions including Shell, Lloyd’s Maritime Academy, the Cambridge Academy of Transport, and the Oxford Princeton Programme.
Prior to joining Fidartis, LLC as GM Finance, Kartik served as CFO of Dynamis Capital Pte. Ltd. and before that as CFO of Fleetscape Capital Limited, an Oaktree Capital-backed maritime investment platform, where he oversaw financial reporting, portfolio valuations, fund reporting, audits, covenant compliance, and capital deployment activities. During his tenure, the Fleetscape deployed over US$200 million of capital across maritime investments.
Earlier, Kartik was General Manager Finance at Chemical Tankers Inc., where he led the refinancing of ten vessels through debt facilities totaling approximately US$235 million, improved liquidity and corporate financial performance, and successfully executed the transition of accounting and corporate administration functions to Singapore, generating significant cost savings for the business.
From 2014 to 2020, Kartik held senior corporate finance roles within the Navig8 Group, including Manager, Corporate Finance and Vice President Finance of Chemical Tankers Inc.. During this period, he played a leading role in arranging and refinancing large-scale vessel financing programs, supporting multiple tanker platforms, managing shareholder and board reporting, preparing listing materials for the Norwegian OTC market, assisting with SEC registration documentation for a proposed New York Stock Exchange listing, and supporting significant strategic transactions including mergers, acquisitions, and fleet disposals.
Prior to Navig8, Kartik worked with Northern Shipping Funds, where he was involved in originating, structuring, executing, and managing shipping investments across debt and equity products. He administered a portfolio of 22 vessels with an aggregate market value exceeding US$400 million and participated in a diverse range of financing structures including sale and leasebacks, mezzanine financing, preferred equity, and senior lending.
Earlier in his career, Kartik spent several years with HSBC Shipping Services in both shipbroking and research consultancy roles. He advised financial institutions, shipowners, and industry participants on shipping markets, asset valuations, investment opportunities, and strategic market developments. His advisory experience included a feasibility study for NNPC regarding the establishment of a national shipping platform and supporting shipping finance activities within the wider HSBC Group.
Kartik began his career at sea with Tanker Pacific Management (now Eastern Pacific Shipping), where he progressed from Deck Cadet to First Mate. Over a ten-year seafaring career, he served aboard a range of tanker vessels, gaining practical operational experience in navigation, cargo operations, safety management, and vessel performance.
Kartik holds an MSc in Shipping Trade and Finance from Cass Business School (now Bayes Business School), University of London, and a First Mate Certificate of Competency issued by the Director General of Shipping, Government of India. He combines deep technical financial expertise with extensive operational shipping knowledge, providing a unique perspective across maritime investments, structured finance, asset management, and corporate strategy.
Fidartis, LLC
Berkeley Square House,
2nd Floor, Berkeley Square,
London, W1J 6BD