HOUSTON, Sept 16 (Askume) – Top energy officials and ministers will hold an annual natural gas technology conference in Houston this week, with a focus on the U.S. market as rising liquefied natural gas (LNG) exports have drawn Europe away from Russian gas and into Asia.
The United States, once an importer of liquefied natural gas, has overtaken Qatar to become the world’s biggest exporter as new technologies have allowed US shale oil producers to tap vast reserves. Both countries are pursuing huge LNG expansion projects that are gaining importance in global markets from Europe to Asia.
The meeting was held in the United States for the first time since 2019, which has become the world’s largest natural gas producer. US natural gas production rose 4% last year to 125 billion cubic feet per day (BCF/D). Subcooled gas export volumes rose 12% to 11.9 BCF/D.
GasTech expects around 50,000 attendees from 125 countries, with conference topics ranging from natural gas markets and decarbonization to artificial intelligence (AI) and energy security.
U.S. natural gas prices have fallen to multi-decades lows this year as supply surges are hurting producers but benefiting consumers and liquefied natural gas companies using record amounts of gas.
By 2026, U.S. LNG exports will double from 2024 levels, and annual feed gas demand will average 19.7 Bcf/d within two years, said Matthew Palmer, executive director of S&P Global Commodity Insights.
Jim Simpson, chief executive of energy research firm East Daily Analytics, said: “Natural gas prices will increase significantly in 2025 as demand for new LNG export projects increases.”
In the United States, additional export capacity would support Europe’s commitment to abandon the use of Russian gas in the wake of Russia’s invasion of Ukraine, while providing Asian buyers with green power generation options.
Venture Global is one of them, and its CEO Mike Seibel will brief attendees on the role of LNG in Europe’s energy supply structure. The company’s Plaquemines LNG export facility in Louisiana, capable of exporting up to 20 million tons per year, is expected to begin operating this year.
London Stock Exchange data showed the United States exported about 7.48 million tonnes of liquefied natural gas in August, with about 43% sold to Asia.
Natural gas producers call for time
US shale gas companies are betting on new LNG terminals to expand the market and prices. Poor returns this year have forced some companies to cut production.
“Supply is more likely to increase rather than decrease over the next nine months as LNG projects won’t start up until late next year,” said Matt Marshall, president of Aegis Hedging.
S&P Global’s Palmer said U.S. producers typically need Henry Hub gas prices above $3 per million British thermal units (MMBtu) to generate cash flow for more drilling. Natural gas prices are currently around $2.33 per MMBtu and have been above $3 only a few times this year.
The US Energy Information Administration (EIA) said in its monthly report this week that Henry Hub natural gas prices are expected to be $2.19 per mmBtu this year, down 11 cents from its previous forecast.
“The big picture is that natural gas producers should not expect the market to grow very quickly until the end of the year. This will take time, and the market will remain sensitive to low prices until next summer,” Aegis Marshall said.
Major US producers such as Chesapeake (CHK.O) and EQT (EQT.N) are preparing to cut output in August and suspend well construction in the second half of 2024 as prices have fallen nearly 40% over the past two months.
Prices are expected to improve as new LNG projects come up and more shale gas is used. The US EIA expects the average price at the Henry Center to be $3.14 next year.
“Our expectation is that as LNG exports increase, the market will rebalance and Henry Hub will reach the $3-4 per mmBtu range, which will support production growth,” Marshall said.
