The natural gas market is beginning to tighten, and demand could rapidly outpace the U.S. supply infrastructure, said executives at EQT, one of the country's largest gas and infrastructure companies.

“While gas prices have already surged, we think there is still room to run and cannot recall as wide of a disconnect between the equity and commodity markets as we are observing today,” said EQT CFO Jeremy Knop during the company’s fourth-quarter earnings call on Feb. 19.

After sitting near $2/MMBtu for the first three quarters of 2024, the Henry Hub price rose above $3/MMBtu in November and hasn’t dropped below it since. A cold front on Feb. 19 boosted prices to $4.35/MMBtu, the highest since December 2022.

Ramping LNG production and growing power demand for AI centers are credited for the bullish market. Most midstream companies have current projects to boost their ability to deliver; however, most are not likely to come online over the remainder of the year.

Knop said the story of 2025 could be the gas market’s demand outgrowing the current midstream infrastructure’s ability to deliver it.

“Appalachia is largely pipeline constrained, and there are no new pipelines out of the Permian until late 2026,” Knop said. “Simply put, it will take too long to increase gas production to meet this step change increase in demand during such a short time. We believe the market may have to balance inventories through demand destruction at the hands of higher prices in 2025 and 2026.”

One of the leading growth factors for natural gas demand is expected to be continual development of AI data centers. EQT executives said the company is in negotiations on several data center projects and is well-positioned to take a leading role in the sector.

The company’s primary production footprint in Appalachia is on top of Virginia, one of the most active centers for AI development in the U.S. EQT can also pitch the company’s emphasis on curbing emissions, Knop said.

“Our net zero credentials are differentiated, especially in that tech crowd,” he said. “In that peer group, we're the only peer.”

EQT is also one of the few gas-focused E&P companies connected to its own midstream network. The company acquired Equitrans, its old midstream segment, in July 2024. Re-integration is 90% complete, said EQT CEO Toby Rice.

The company believes access to gas and delivery gives it a leg up with tech companies looking to power a project.

“Speed to market is a critical component,” Rice said. “That is how EQT will differentiate ourselves—Simple, one-stop shop, best, cleanest, most reliable, most affordable gas on the market.”

Positive quarter

For the fourth quarter, analysts gave EQT positive reviews.

“EQT reported excellent 4Q24 results underpinned by higher production, stronger realized gas prices and lower overall operating costs with a lower capex, driven by improved capital efficiencies, despite curtailments,” said Siebert Williams Shank & Co. in an analysis published Feb. 19.

The company’s free cash flow for the quarter hit $580.2 million, well above market estimates of $354.7 million.

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