Expand Energy more than doubles Delfin LNG offtake
Expand Energy has terminated its first-ever offtake agreement with Delphin LNG and replaced it with a larger contract that more than doubles volumes to 1.15 mtpa of LNG per year at Henry‑Hub‑linked pricing. Shipments will originate from Delfin FLNG Vessel 1, with targeted commercial start around 2031.
Haynesville could dent 12 bcf/d of US LNG demand by 2030
Expand Energy, the largest gas producer in Haynesville Shale, is poised to cash in from the basin’s proximity to expanding LNG terminals. “Within a 300-mile radius of our Haynesville assets, there are more than 12 bcf/d of LNG demand under construction to be in service by 2030,” Nick Dell’Osso, CEO of Expand Energy told analysts.
Henry Hub prices at 5-month low despite robust production
Bearish shoulder-season fundamentals have made prompt gas prices at Henry Hub fall to their lowest level in five months at just above $3/MMBtu. Appalachia production stayed robust, despite seasonal maintenance, while Haynesville basin output is set to rise by 1 bcf/d year-on-year, weighing on prompt prices.
Fundamentals are largely influencing price discovery at Henry Hub, the most liquid gas trading point in the United States.
Modelling by Energy Aspects indicates that gas production in the Lower 48 States exceeded 107 bcf/d over the past weekend, with gas flows from the Appalachia Basin remaining strong despite maintenance activities and lower regional consumption. Appalachia production notched up 0.3 bcf/d and averaged 34 bcf/d, offsetting the decline in associated gas production from the Permian Basin caused by maintenance on the Permian Highway pipeline which lowered flows by 0.9 bcf/d over the past few days.
Profitable regional economics – despite Henry Hub’s recent selloff – has led to robust Appalachia production in March and April. According to US government figures, regional flows averaged 33.5 bcf/d in March and 33.9 bcf/d in April, up from 32.8 bcf/d over the previous two months. Maintenance works since early March seem to have a "minimal effect on flows," analysts noted.
Appalachia gas volumes, in fact, reached a higher baseline and higher flows. The latest surge in production comes from MarkWest Liberty Midstream and DT Midstream, as per pipeline data.
Energy Aspect’s fundamental outlook for the remainder of the shoulder season is for the year-on-year storage gap to close considerably in the second quarter of 2025, with an estimated injection of 342 bcf for April and 438 bcf for May. Rising upstream gas supply would increase Lower 48 storage levels to about 2.60 trillion cubic feet, still 284 bcf lower year-on-year.
Haynesville flows stay tepid
Gas flows from the Haynesville basin, in contrast, stay subdued as producers were cautiously slow to respond to higher price at the start of the year. As of 17 April, the Haynesville rig count stands at 31 rigs, three rigs lower year-on-year.
Energy Aspects anticipates a modest increase in rig activity by the third quarter of 2025, averaging 33 rigs, two rigs higher quarter-on-quarter. This expectation is based on recent producer guidance indicating production growth for winter 2025–26 to support weather-induced demand and LNG feedgas expansion. Core Haynesville activity in Louisiana will likely contribute most of this growth, reaching 27 rigs by December, nine rigs higher than current levels.
Upstream investment drives further growth: Comstock in its Q4-24 earnings call announced plans to spend $130–150 million on Western Haynesville infrastructure in 2025. Funding will come from their partner, Quantum Capital Solutions. Comstock said it will operate four rigs in Western Haynesville in 2025 on average and intends to drill 20 further wells in the near future.
Aethon Energy, another major producer in Western Haynesville, earlier this year announced it would need Henry Hub prices to reach $5/MMBtu to incentivise investment to grow output. Analysts estimate the company’s rig count in Texas Haynesville will reach seven rigs by December, six rigs below current levels.
LNG export exposure
Latest US government data indicates Western Haynesville production reached 0.71 bcf/d in February, with Comstock averaging 0.32 bcf/d (45% of sub-basin production). Currently, Haynesville's production averages 11.5 bcf/d month-to-date, 0.1 bcf/d lower month-on-month.
“Yet, incremental production from new activity remains elusive due to producer discipline,” analysts commented.
Expand Energy announced estimates that its Q1 25 Haynesville production will average 2.6 bcf/d, some 0.2 bcf/d higher quarter-on-quarter, while operating seven regional rigs, one less than the first quarter. The company’s Haynesville portfolio has approximately 2 bcf/d of exposure to LNG export facilities, with an additional 2.5 bcf/d in deliverability expected by the end of 2025, including 1 bcf/d of Gillis volumes that will come to market via the new NG3 pipeline.
Expand Energy’s growth of Haynesville output hinges on LNG demand
Strong global LNG demand has prompted Expand Energy to allocate up to $1.2 billion for drilling and completing rigs in the Haynesville Basin, 4% of its total drilling Capex. These monies spent cater for seven to nine new rigs as Expand Energy is the most cost-efficient player in the Haynesville, with a 12-month weighted average breakeven cost of $2.0/mcfe.
