Structured Finance for LNG Cargoes, Supply Contracts and Working Capital

LNG tanker transporting liquefied natural gas by sea
LNG Trade Finance Advisory
Finance LNG Cargoes, Contracted Flows and Trading Programs

We provide structured LNG trade finance advisory for established traders, suppliers, importers, utilities and industrial buyers executing physical liquefied natural gas transactions.

Our work covers transaction analysis, financing structure, credit packaging, capital-provider selection and execution support across cargo finance, letters of credit, borrowing bases, prepayments, receivables and structured working-capital facilities.

Paid B2B advisory services. Financely is not an LNG producer, physical commodity trader, bank or direct lender. Financing remains subject to third-party underwriting, compliance and approval.

LNG Trade Finance Starts With the Commercial Transaction

Liquefied natural gas trading creates substantial working-capital requirements because cash obligations occur at different points across procurement, loading, shipping, discharge and buyer settlement.

The financing requirement may arise because a supplier requires a documentary letter of credit, cash margin or prepayment. In other cases, the trader has already funded the cargo and needs liquidity against inventory or an eligible receivable. Larger trading programs may require a revolving borrowing base rather than financing each shipment independently.

Financely reviews the complete commercial chain before determining how the transaction should be presented to capital providers. This includes supplier and buyer contracts, payment timing, Incoterms, cargo economics, title transfer, vessel and terminal information, insurance, credit support and the expected repayment source.

LNG transactions sit within our wider structured trade finance practice.

What We Provide

Structured trade finance advisory for physical LNG transactions requiring a lender-ready financing architecture.

The mandate can include underwriting preparation, transaction structuring, facility design, lender mapping, targeted distribution and support through diligence and documentation.

Structuring Capital Around the LNG Trade Cycle

LNG finance is usually most effective when the facility is built around identifiable contractual cash flows, eligible assets and lender controls. Depending on the transaction, the credit case may rely on a buyer receivable, an issuing bank obligation, controlled inventory, contractual offtake, title to the cargo or a combination of these elements.

Financely also advises on petroleum, refined fuels and related energy transactions through our oil and gas trade finance practice.

LNG Trade Finance Structures

Facility design depends on the point in the transaction where liquidity or credit support is required. The following structures can be considered individually or as part of a larger revolving program.

Documentary Credit

Letter of Credit Finance

Documentary letter of credit structures used to support LNG purchases where the seller requires bank-backed payment against compliant shipping and transaction documents.

The advisory work can include letter of credit structure, collateral requirements, confirmation, refinancing mechanics and documentary conditions.

Revolving Capital

Borrowing Base Facilities

Revolving facilities where availability is calculated against defined eligible assets such as LNG inventory, contracted receivables or other approved components of the trading book.

Read more about borrowing base facilities for commodity traders.

Contracted Flow

Prepayment Finance

Liquidity advanced against future LNG deliveries or contracted commodity flows where the repayment structure can be linked to an acceptable buyer, offtaker or controlled sales proceeds.

Single Transaction

LNG Cargo Finance

Short-duration financing for a defined LNG cargo where purchase, transport, sale and settlement can be analysed as one transaction with identifiable repayment mechanics.

Post-Delivery

Receivables Finance

Financing or monetisation of eligible receivables following LNG delivery to approved utilities, industrial groups, distributors or other creditworthy buyers.

Asset Control

Inventory and Repo Structures

Financing structures using controlled commodity inventory, enforceable title, sale-and-repurchase arrangements or comparable collateral mechanics where they are legally and commercially appropriate.

Procurement

Supplier Payment Facilities

Facilities designed to pay an approved LNG supplier while allowing the trader or buyer to repay after cargo delivery, resale or collection of the downstream receivable.

Risk Mitigation

Credit Enhancement

Where the base transaction requires additional support, the structure may incorporate guarantees, standby letters of credit, trade credit insurance or other acceptable risk-mitigation mechanisms.

See our credit enhancement advisory capabilities.

LNG Financing Scenarios

The financing product should solve a specific liquidity, credit or settlement issue within the physical trade.

Commercial Situation Financing Requirement Potential Structure
LNG trader purchases a cargo for onward sale Supplier requires payment before proceeds are received from the buyer Cargo finance, letter of credit, prepayment or transactional facility
Buyer requires deferred payment terms Trader cannot carry the full receivable tenor on its own balance sheet Receivables finance, discounting or insured receivable facility
Supplier requires bank-backed settlement Buyer or trader has insufficient documentary credit capacity Letter of credit structure, collateral support or credit enhancement
Trader executes several LNG cargoes each year Repeated one-off financing limits scale and increases execution friction Revolving facility or borrowing base
Future LNG deliveries are covered by an acceptable offtake Liquidity is required before delivery and customer settlement Prepayment or offtake-backed financing
LNG has been delivered but customer settlement remains outstanding Cash remains tied up in a performing receivable Receivables purchase, discounting or revolving AR line

What LNG Trade Finance Providers Underwrite

A lender needs to understand the complete route from its initial advance to final repayment. Each part of the LNG transaction has to support that credit analysis.

Supplier

Identity, operating history, contractual position, pricing, payment terms and evidence of ability to supply the contracted volume.

Buyer or Offtaker

Credit standing, purchase commitment, settlement mechanism, historical performance and enforceability of payment obligations.

Cargo Economics

Purchase price, sales price, freight, insurance, terminal charges, financing cost, hedge requirements and expected gross margin.

Shipping and Logistics

Loading port, discharge location, vessel information, terminal access, shipping timeline, Incoterms and title transfer.

Documentary Control

Purchase and sale contracts, bills of lading, inspection documentation, insurance, invoices and relevant bank instruments.

Repayment

Timing and location of buyer proceeds, account control, assignment mechanics and how the financing provider receives repayment.

Commodity Price Risk

Exposure between purchase and resale, pricing formulas, hedge policy, margin sensitivity and contractual mechanisms affecting realised economics.

Counterparty Concentration

Dependence on individual suppliers, buyers, shipping providers, terminals or jurisdictions and the effect on facility availability.

Compliance

KYC, beneficial ownership, sanctions exposure, commodity origin, vessel screening, jurisdictions and transaction documentation.

For a broader view of lender preparation, see how to structure a commodity finance deal.

LNG Trade Finance Advisory Scope

Our mandate is designed to move the transaction from commercial information to an institutional financing process with a defined structure, credit package and execution pathway.

01

Diagnose

Map the contracts, cash cycle, counterparties, financing gap and repayment source.

02

Underwrite

Review trade economics, execution history, documentation, controls and credit risks.

03

Structure

Determine facility type, collateral package, payment controls and repayment architecture.

04

Distribute

Approach suitable banks, commodity lenders and institutional credit providers.

05

Execute

Coordinate diligence, term discussions, information requests and closing workstreams.

Our broader trade finance structuring work covers documentary instruments, structured commodity facilities and transaction-specific credit architecture.

LNG Trade Finance Advisory Is a Paid Professional Mandate

Significant work occurs before an LNG transaction is suitable for institutional distribution.

The commercial contracts and financing requirement have to be reviewed. The transaction cash cycle needs to be mapped. Counterparty, documentary, logistics and repayment risks need to be identified. The facility architecture then needs to be designed around the transaction, supported by appropriate lender-facing materials and presented to institutions whose mandate fits the request.

Financely therefore provides LNG trade finance services under a defined advisory engagement. The scope can cover underwriting preparation, structuring, lender mapping, distribution and execution support. Commercial terms depend on the facility size, transaction complexity, existing documentation and work required.

Advisory fees compensate the professional work required to prepare and execute the mandate. They are separate from lender interest, bank charges, legal fees, insurance premiums, inspection expenses and other third-party transaction costs.

Companies seeking a transaction-specific scope can request an LNG trade finance advisory quote.

What We Need to Assess an LNG Trade Finance Mandate

The strongest submissions make it possible to reconstruct the complete trade cycle without relying on assumptions.

Transaction Information

  • Requested facility amount and currency
  • Expected tenor
  • LNG volume and transaction value
  • Supplier identity
  • Buyer or offtaker identity
  • Purchase price or pricing mechanism
  • Sale price or pricing mechanism
  • FOB, DES or other applicable delivery terms
  • Loading and discharge locations
  • Supplier payment requirement
  • Buyer settlement terms
  • Expected gross margin

Supporting Documentation

  • Corporate KYC and ownership information
  • Financial statements or management accounts
  • Purchase contract or draft SPA
  • Sales contract or offtake documentation
  • Historic transaction evidence where available
  • Existing bank facilities
  • Letter of credit or SBLC requirements
  • Shipping and terminal information
  • Insurance documentation where available
  • Proposed collateral or credit support
  • Existing lender correspondence if relevant

Transactions That Are Difficult to Place

Commodity finance providers invest substantial resources in KYC, transaction verification and credit analysis. Certain transaction profiles are unlikely to progress.

Long Broker Chains

Multiple undocumented intermediaries between the applicant and the actual LNG supplier or buyer create contractual, KYC and execution problems.

Unverified Supply

An LOI, soft corporate offer or unverified allocation does not establish that the applicant has executable access to LNG supply.

No Defined Repayment Source

The facility request must show where repayment originates, when proceeds are generated and how the lender gains sufficient control over the repayment flow.

Insufficient Transaction Economics

Gross margin must remain viable after freight, insurance, terminal expenses, financing charges, hedge costs and execution contingencies.

Compliance Gaps

Incomplete beneficial ownership information, sanctions issues, vessel concerns or unclear commodity origin can prevent a transaction from moving through institutional underwriting.

Unrealistic Execution Timelines

A transaction requiring a complex facility or bank instrument cannot be treated as immediately available capital before credit, legal and compliance work is completed.

How to Start an LNG Trade Finance Mandate

Step 1

Submit the Transaction

Provide the requested facility, supplier, buyer, transaction value, route, payment structure and available supporting documents.

Step 2

Mandate Review

We assess whether the transaction fits our advisory scope, identify major structuring issues and determine the work required.

Step 3

Advisory Proposal

Suitable transactions receive a commercial proposal setting out the advisory scope, professional fees and expected deliverables.

Step 4

Structuring and Execution

Once engaged, we undertake the agreed underwriting, structuring, capital-provider outreach and execution work.

Who We Advise

Our LNG trade finance work is designed for businesses executing identifiable physical commodity flows rather than speculative financing requests.

LNG Traders

Transactional and revolving capital for purchase, sale and settlement cycles.

LNG Suppliers

Prepayment, receivables and structured liquidity against contracted deliveries.

Importers and Distributors

Supplier payment, documentary credit and working-capital structures.

Utilities and Industrial Buyers

Procurement finance and credit structures around contractual LNG purchases.

Request an LNG Trade Finance Advisory Quote

Submit the facility amount, supplier, buyer or offtaker, LNG volume, delivery terms, route, payment mechanics and documents currently available. We will assess the mandate and provide commercial terms where the transaction fits our structured trade finance advisory practice.

Request an Advisory Quote

LNG Trade Finance FAQ

What is LNG trade finance?

LNG trade finance is financing structured around the purchase, shipment, storage, sale or collection of physical liquefied natural gas. The facility can be linked to individual cargoes, recurring transactions, inventory, receivables, documentary instruments or contracted commodity flows.

Does Financely finance LNG directly?

No. Financely provides structured trade finance advisory and capital-source coordination. Financing is provided by third-party institutions following their own underwriting, compliance and approval process.

Can an LNG cargo be financed individually?

Individual cargo financing can be considered where the supplier, buyer, purchase terms, sales terms, logistics, title mechanics, transaction economics and repayment source are sufficiently defined.

Can you advise on letters of credit for LNG purchases?

Yes. The advisory scope can include documentary letter of credit structure, issuance requirements, confirmation, collateral considerations, refinancing mechanics and alignment between letter of credit conditions and underlying shipping documents.

What is an LNG borrowing base facility?

A borrowing base facility is generally a revolving structure where available financing is calculated using defined eligible assets such as inventory or receivables. Lenders typically apply advance rates, concentration limits, reserves, reporting requirements and collateral controls.

Can recurring LNG trades receive a revolving facility?

Potentially. Established transaction history, recurring counterparties, reliable reporting, acceptable collateral controls and predictable repayment flows can support a revolving structure instead of financing every cargo separately.

Can LNG receivables be financed?

Eligible receivables from acceptable buyers may support discounting, receivables purchase or revolving facilities. Advance rates and availability depend heavily on debtor quality, contractual rights, concentration, assignment mechanics and jurisdiction.

What documents should we submit?

Submit corporate KYC, financial information, supplier and buyer details, purchase and sales documentation, transaction value, cargo volume, route, Incoterms, payment terms, financing requirement and any available bank, insurance or collateral documentation.

Does Financely charge advisory fees?

Yes. Financely provides LNG trade finance advisory under paid professional engagements. The commercial structure depends on the size and complexity of the mandate and the underwriting, structuring, distribution and execution work required.

Is LNG financing guaranteed?

No. Any financing remains subject to independent lender underwriting, KYC, AML and sanctions review, transaction verification, legal documentation, collateral analysis and satisfaction of applicable conditions precedent.

Where can I review other trade finance structures?

Review our wider structured trade finance services covering pre-shipment finance, receivables, inventory, letters of credit, guarantees and other transaction structures.

Important: Financely provides paid corporate-finance and structured trade finance advisory services on a best-efforts basis. Financely is not a bank, direct lender, deposit-taking institution, LNG producer or physical commodity seller. No financing commitment, credit approval, facility pricing or transaction outcome is expressed or implied. Financing, issuance, custody, insurance, legal work and regulated activities are performed by the applicable independent counterparties under their own approvals. Transactions remain subject to underwriting, KYC, AML, sanctions and vessel screening, transaction verification, legal due diligence, documentation, collateral requirements, market conditions and applicable conditions precedent.