Why are U.S. LNG developers insisting on long-term contracts?

U.S. LNG export terminals are highly capital-intensive projects costing billions of dollars. Financial institutions and lenders require guaranteed, long-term revenue streams—typically 15 to 20 years in duration—to underwrite the debt needed for construction, making these contracts a prerequisite for reaching a Final Investment Decision.

How does this contracting friction affect Southeast European energy security?

If regional hubs like Greece cannot secure stable, long-term LNG contracts, Southeast Europe will remain highly vulnerable to seasonal price volatility and supply squeezes on the spot market. This could slow down the region's transition away from coal and Russian pipeline gas, as alternative secure volumes remain elusive or prohibitively expensive.

Could European buyers look to other regions if U.S. deals fall through?

Yes, European buyers may increasingly look to Qatar, which is undergoing a massive LNG expansion, or African producers like Algeria and Mozambique. However, Qatar also favors long-term contracts and often demands strict destination clauses, meaning European buyers face similar structural challenges globally.

Rigzone · June 11, 2026 (Jun 11) · 1 min read

Greek LNG Buyer Says Long Term USA Deals Getting Harder

Analysis

AI-assisted analysis · reviewed by Yuri Kan

The growing difficulty in securing long-term U.S. liquefied natural gas (LNG) contracts highlights a tightening global supply market and a widening gap between buyer and seller expectations. As European buyers seek flexible, mid-term commitments to align with decarbonization targets, American developers are holding out for 15-to-20-year agreements to secure project financing. This friction threatens to slow down the build-out of next-generation U.S. export terminals, forcing European importers to reassess their long-term energy security strategies.

Key Facts

The leadership of Atlantic SEE LNG Trade, a prominent Greek energy procurement entity, publicly stated that negotiating long-term LNG supply agreements with United States exporters has become increasingly challenging.
U.S. LNG developers are strictly demanding 15-to-20-year Sale and Purchase Agreements (SPAs) to achieve Final Investment Decisions (FID) on new liquefaction terminals.
European buyers, particularly in the Southeast European corridor, prefer shorter contract durations of 5 to 10 years to avoid stranded asset risks associated with the EU's 2050 net-zero carbon targets.
The pricing mechanism for U.S. LNG remains heavily tied to the domestic Henry Hub index plus liquefaction fees, which has become less competitive as global spot prices fluctuate.
Regulatory uncertainty in the United States, including the Biden administration's temporary pause on non-FTA LNG export approvals, has further complicated contract negotiations and project timelines.
Greece is actively positioning itself as the primary energy gateway to the Balkans and Southeast Europe through infrastructure like the Revithoussa terminal and the new Alexandroupolis FSRU.

Background & Context

Following the disruption of Russian pipeline gas supplies in 2022, Europe turned heavily to U.S. LNG to fill the supply deficit, relying largely on the spot market and short-term portfolios. However, spot market volatility exposed buyers to extreme price spikes, prompting a strategic shift toward securing long-term contracts for price stability. Simultaneously, U.S. developers require these long-term commitments to satisfy debt providers and equity investors for multi-billion-dollar infrastructure projects, creating a structural clash between European regulatory timelines and American financing models.

Market Impact

This contracting bottleneck is likely to delay several pending U.S. LNG export projects that have not yet reached FID, potentially tightening global supply in the late 2020s. For European utilities and traders, the inability to secure long-term U.S. volumes means continued exposure to volatile spot markets or a forced reliance on costlier intermediaries. Portfolio players and global trading houses may step in to bridge the gap, buying long-term from the U.S. and selling short-term to Europe, albeit at a premium that will ultimately be passed down to regional industries and consumers.

What to Watch

Market observers should watch for whether European buyers begin conceding to longer 15-year terms under pressure of supply security, or if U.S. developers find alternative backing from Asian buyers who are more amenable to long-term deals. Additionally, the resolution of the U.S. DOE export permit pause will be a critical milestone determining the viability of the next wave of supply. Over the coming months, the commercial operations of the Alexandroupolis FSRU will test Greece's capacity to manage regional supply without new long-term bilateral U.S. contracts.

Why This Matters for Cyprus

As Greece serves as the primary energy conduit for the wider East Mediterranean and Balkan regions, supply bottlenecks faced by Greek buyers directly impact the energy security of neighboring countries, including Cyprus. Cyprus is currently developing its own LNG import infrastructure via the Prometheas FSRU project in Vasilikos; a tighter global LNG market means Cyprus will face higher costs and stiffer competition when sourcing commissioning cargoes and long-term supply contracts. Furthermore, these market dynamics underscore the urgency for Cyprus to commercialize its domestic offshore gas discoveries, such as Aphrodite and Cronos, as regional alternatives to expensive imports.

Frequently Asked Questions

Why are U.S. LNG developers insisting on long-term contracts?: U.S. LNG export terminals are highly capital-intensive projects costing billions of dollars. Financial institutions and lenders require guaranteed, long-term revenue streams—typically 15 to 20 years in duration—to underwrite the debt needed for construction, making these contracts a prerequisite for reaching a Final Investment Decision.
How does this contracting friction affect Southeast European energy security?: If regional hubs like Greece cannot secure stable, long-term LNG contracts, Southeast Europe will remain highly vulnerable to seasonal price volatility and supply squeezes on the spot market. This could slow down the region's transition away from coal and Russian pipeline gas, as alternative secure volumes remain elusive or prohibitively expensive.
Could European buyers look to other regions if U.S. deals fall through?: Yes, European buyers may increasingly look to Qatar, which is undergoing a massive LNG expansion, or African producers like Algeria and Mozambique. However, Qatar also favors long-term contracts and often demands strict destination clauses, meaning European buyers face similar structural challenges globally.

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