Producers show greatest gains in North American Natural Gas Marketers Rankings

Natural gas volumes sold by several US producers increased significantly in Q4 2021 compared to Q4 2020 as the benchmark Henry Hub nearly doubled during that time frame, according to the latest S&P Global Commodity Insights North American Natural Gas Marketers Rankings.

However, volumes sold by three of the top five North American Natural Gas Marketers all declined year over year.

Producer Southwestern Energy posted the largest growth in marketed gas volumes from Q4 2020 to Q4 2021, based in large part due to acquisitions in the most prolific gas basins. Southwestern's volumes sold increased nearly 40%, from 3.43 Bcf/d to 5.51 Bcf/d.

Those volumes are expected to grow even more during the first quarter of 2022 following the completion of the acquisition of GEP Haynesville on Dec. 31, 2021. This closely followed the acquisition of another Haynesville producer, Indigo Natural Resources in September. Prior to being acquired, GEP Haynesville produced around 700 MMcf/d and Indigo produced around 1 Bcf/d, according to Southwestern statements.

The company expects more than 75% of gas demand growth through 2025 to come from the Gulf Coast region, CEO Bill Way said, during Southwestern's latest quarterly earnings report. Stronger export demand for LNG and for pipeline exports to Mexico are expected to support the growth.

Another shale gas producer, EQT Corp., also posted significant gains from Q4 2020 to Q4 2021, climbing 20% from 4.36 Bcf/d to 5.4 Bcf/d. EQT also plans to market more gas through LNG export terminals.

EQT's chief financial officer David Khani said EQT will likely sign its own LNG supply contracts later this year, with prices pegged to higher-priced European or Asian indexes rather than the US benchmark Henry Hub.

With demand for LNG high, prices at record levels, inventories low in Europe and Russia's war in Ukraine raising fears of global supply disruptions, Sempra is working aggressively to commercialize plans for a fourth liquefaction train at Cameron LNG. The train would be designed with capacity of 6.75 million mt/year. EQT is expected to be one of the suppliers.

US shale producers Coterra and Chesapeake also made substantial gains in volumes marketed as both jumped nearly 30% from Q4 2020 to Q4 2021 to 3.12 Bcf/d and 2.73 Bcf/d, respectively.

The timing appears advantageous to expand marketed volumes as Henry Hub spot and futures prices have increased dramatically over the past year. Henry Hub spot averaged $4.77/MMBtu during Q4 2021, up from $2.53/MMBtu during Q4 2020.

Presently, each NYMEX forward curve natural gas futures contract over the next 11 months through February 2023 is now trading well north of $5/MMBtu, according to S&P Global. There are multiple drivers behind the upside action, with temperature forecasts being the key component behind the price strength. At the same time, bullish action in NYMEX WTI oil futures also helped to support gas futures prices.

While several of the major gas marketing firms did undergo declines in volumes sold from Q4 2020 to Q4 2021, most of those declines were less than 10%.

Top North American Gas Marketers Q4 2021

*US volumes only; **Prior to Williams acquiring SEM as part of its marketing business segment

Source: Company submissions, SEC filings and quarterly reports