EQT, the largest Appalachian producer, released its latest earnings report, providing valuable insight into the Appalachian basin and infrastructure developments, and the trajectory of L48 natural gas demand growth.
Appalachia
In Appalachia, EQT highlighted both demand growth and takeaway capacity projects approaching soon. They identified over 45 demand and takeaway projects under construction or in evaluation in the basin, totaling nearly 20 Bcf/d of potential demand growth in the region over the next decade. EQT pushed up the construction start date for their MVP Southgate Expansion project. The expansion will connect Appalachian supply to growing demand centers in the Carolinas. However, current estimates don’t have MVP Mainline capacity itself increasing capacity until MVP Boost in 2028.
On the Appalachian supply side, they suggested that roughly one-third of Southwest Appalachia supply could struggle to hold flat production by decade-end due to inventory limitations. They concluded that as demand growth pulls more gas while Appalachian producers’ inventory quality declines, they expect “pricing that provides a further incentive to go into zones that are less economic so certain operators [still] have the economic justification to drill.” -Jeremy Knop, EQT CFO
US Natural Gas
As for US LNG, they highlighted that disruptions related to Iran has effectively erased the previously anticipated 2028-2030 LNG glut. However, for them, most of their LNG portfolio is projected to begin in 2030, with contracted volumes for Rio Grande T 4-5, Port Arthur Ph2, Commonwealth, and Texas LNG. Overall, they forecast L48 LNG exports to gain between 12-15 Bcf/d of demand by 2030, and 20-25 Bcf/d of demand by 2040.
Finally, EQT foresees the US entering a period of significant natural gas demand and load growth. They forecast roughly 10 Bcf/d of incremental gas demand by the end of the decade driven by data center build-out and coal retirements. For context, natural gas demand grew 14 Bcf/d from 2014-2026, and their upside case surpasses even this, at 18 Bcf/d of incremental gas demand. However, they foresee some risks next year due to “Permian growth potential [and] super El Niño weather patterns.” -Jeremy Knop
Overall, EQT highlights medium-to-long-term bullish trends that they foresee affecting gas markets. A combination of LNG export growth, Power demand growth, and coal retirements give them an optimistic view for natural gas production over the next decade.