US LNG eats itself
The American gas export boom risks becoming a victim of its own success. Can the waning shale sector pull off a production miracle?
The European and American gas markets are changing places. After years of dramatic wartime price action, the Old Continent is becoming decidedly boring. Hub prices are stuck in a strong bearish sideways trend despite the promise of colder weather around the corner. The LNG glut is finally here.
Meanwhile in America, after years of shale abundance and low prices, the domestic gas market is tightening on LNG plants’ insatiable thirst for feedgas. Henry Hub has spiked more than 50% since mid-October, driven by colder weather and record exports.
Energy Flux has been warning for some time that US LNG risks eroding its own competitiveness. Unfettered export expansion drives up feedgas costs at home while helping to quell sales prices in export markets, compressing inter-basin margins.
The latest Henry Hub spike might be only temporary. Or it could signal a deeper structural change. Either way, it reinforces those earlier warnings and gives a taste of what’s to come: US LNG profit cannibalisation. And with 2025 shaping up to be a record-breaking year for LNG project final investment decisions (FIDs), this is just the start of glut-era gas economics.
IN THIS ISSUE (click to expand) 👇
- The margin vice: How is the US LNG boom simultaneously spiking its own costs and crushing its own profits?
- The shale reckoning: Why can’t higher prices solve the looming gas supply crisis?
- The coming purge: How will a glut of loss-making cargoes trigger a brutal industry shakeout?
- The innovation imperative: How are the smartest buyers already hedging the risk?
- Get the PDF: Download a special US shale gas outlook slide deck, courtesy of a mystery contributor...
💥 ARTICLE STATS: 3,000 words, 12-min reading time, 10 charts & graphs
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