The world’s biggest bet in terms of energy remains on natural gas. Even with prices low, big importers are putting their money down on larger investment in terminals to import liquefied natural gas (LNG) and re-gasify to be used for power generation and energy. That’s where EQT and Equitrans Midstream come in, as the two U.S.-based companies, the latter once a subsidiary of the former, are set to combine in a $35 billion deal so they can “compete on the global stage” against other vertically integrated companies, EQT’s CEO, Toby Rice, said.
The deal also marks the ongoing consolidation following Chesapeake Energy’s plan to buy Southwestern Energy, in a deal announced in January. The U.S. is now the world’s largest natural gas producer – and the boom has brought prices down sharply because there’s only a limited amount of gas that the country can export given it takes years to build LNG terminals. Natural gas futures are lately scraping $1.78 per million BTUs, levels not seen since the outbreak of coronavirus in 2020, after another mild winter in Europe.
Japan, the second-biggest natural gas importer behind China, has been boosting its own reliance on long-term supplies from its allies in Australia and the United States, two of the biggest exporters of the gas. That country has traditionally relied on long-term contracts from Russia set to expire in coming years. While the U.S. has proved adept at adding export supply – of which much more is expected – that doesn’t mean there isn’t conflict. Several large European importers have recently asked U.S. regulators to deny permit extensions to Venture Global to finish its LNG project, saying they have not received cargoes they had already contracted and paid for.
The rising reliance on natural gas presents concerns environmentally. Natural gas pipeline accidents are highly underreported, and contribute substantial amounts of methane to the atmosphere. Pipeline mishaps unintentionally released nearly 9.7 billion cubic feet of gas into the atmosphere between 2019 and late 2023, according to a Reuters examination of federal data.
