Jordan Blum, editorial director, Hart Energy: We are here at the massive Gastech conference in Houston. I am joined by Will Jordan, the executive vice president and general counsel with EQT. Thank you so much for joining us. Really appreciate it.

So as the top producer in the Appalachia region, just really wanted to get your take on the current dichotomy, I guess, with lower gas pricing, but also a lot of bullishness on long-term demand and just how we're managing things in the interim.

William Jordan, executive vice president and general counsel, EQT: Yeah, sure. I mean, I think it's important to start with the latter. Just look at the long term of the macro, where gas is going. We're increasingly seeing gas price being the storage mechanism of the United States. We have a system that over the past decade or so, demand for natural gas has increased 50%. Storage has only increased by about 12%. And so, as that historical mechanism for balancing supply and demand in the short term has been maxed out of its capacity, now it's turning to price to saying, “okay, producers need to shut in gas or delay activities to clear out any excess.” So after the kind of the boom of 2022, we had a period of warm winter. We didn't see as much demand come through in the winter, and so this is a natural time for that demand to be getting cleared out by pricing. We see pricing coming back up in 2025 and beyond, stabilizing around that marginal cost of production that we think in the United States, which is the Haynesville at about $3.50 gas. So combined with some of the more macro developments around the emergence of AI and data center demand, we're very bullish about the long term of the natural gas industry.

JB: Great. Well, one factor there is obviously, for the first time in a long time, rising domestic demand, and in the Appalachia region you have a lot of in-basin demand growth potentially with data centers in Virginia and throughout the area. Can I get your take on how that's going and will go and how EQT is set to benefit?

WJ: Yeah, so I think we benefit from the fact that Data Center Alley and Virginia is already there and building, but as you think about the needs of AI and the power generation needed, that's really what's driving the load growth projections that you're seeing that for the last 10 years have been flat. Now gas demand has grown up, but gas demand for purposes of electricity generations have been roughly flat.

Now, we're seeing pretty significant peaks being driven by that AI movement. For us, we think that—look the United States has the ability to play in this AI growth, and we really need to capture it. We don't want the AI industry to be shifted to adversaries. We think this is the scenario where we have an advantage.

And so when you look at what opportunities are out there to power AI and power demand centers, you need 24-hour, reliable product. There's a limited amount of time to get there. We can't build a 10, 15 year project in order to facilitate a rapid transition. Natural gas is available in ample supply, low emissions in Appalachia, and it's a very attractive opportunity for some of the partners that we've been talking with on the AI, so.

JB: Now, obviously for a long time takeaway capacity, infrastructures has been a problem—and it still is—and there's political and regulatory impacts there, but just wanted to get your take on how all that is evolving and how EQT is benefiting with the M&A activity with the Equitrans Midstream merger.

WJ: Yeah, I mean, I think that to your point … there's been about a decade of failing to have infrastructure built that is being signaled by the market as being demanded. And so almost all of that was coming out of Appalachia. It was coming out of Appalachia because Appalachia gas is the cheapest, cleanest gas in the United States, if not the world. And so you've seen the market react in a natural way to where that transmission wasn't there. The demand has moved into Appalachia.

That's why these data centers are in Appalachia is because they can't get the access to the resource elsewhere because projects have been getting blocked. I think there's a really, we're at an inflection point, I feel like, as far as the potential for pipelines to get built. I think it's turning from being difficult to now the recognition of the impacts of that is starting to be felt. We're seeing it in the political level, but also in prices in certain regions country. And so I'm bullish about the potential for pipelines or about politicians to be making good decisions, for instance, on permitting reform to allow these projects to be built in a cheap manner. But if it isn't, Appalachia will still thrive because it has the resource that is needed.

JB: Very good. Obviously, the other part of bullishness for gas is LNG. Y'all are doing a lot more with heads of agreement deals, tolling deals with LNG facilities. I know a lot of that's non-binding, but can I get your take on just how important this is, how this fits in with the strategy and how you see it evolving?

WJ: Yeah, I mean, we benefit from having, and just zooming way back, we benefit from having an inventory that allows us to look at projects and think about our company in the 30- and 50- and 100-year timeframe. So we don't chase short-term fads. We kind of ground ourselves in what we truly believe is going to happen over the long term. And fundamentally, we believe that LNG is going to be a critical part of addressing climate change.

We believe that U.S. LNG is going to be a critical part of addressing climate change. And as one of the holders of the biggest resource, we're building towards being able to play the role that our company should play in that. We're not going to be 100% LNG, but we're going to see more involvement over time.

So we're taking the steps to learn about the market in a measured way. You're not going to see us making any big moves on the LNG side. We're going to take our time, we're going to do the steps that are needed to get the competencies. And signing up for these tolling agreements is one of the processes… It will take some more time for us to get to where those are finalized, but we're hoping to have gas on the water towards the back half of the decade and start the learning process there.

JB: Very good. The only other thing I think I wanted to ask about is just kind of upstream M&A and basin consolidation that's going on. There's been a lot of deal making the last year and a half, two years, obviously, and you've got pending right now, Chesapeake-Southwestern. Just how do you see that continuing to transpire and EQT's role? And I guess piggybacking on that just a bit, just any FTC concerns that get involved in.

WJ: Yeah, so look, the consolidation that's happening in the industry is not happening just because people want to get bigger. The consolidation is happening because we had an industry that was not sustainable, and our company is an example of that. When we came in in 2019, our breakeven was over $3 of Mcf. We did a lot of work and we've had a very methodical approach and strategy to getting to the place where we are now, which is being able to produce gas for under $2. That's been the driver. In a commodities business, the only strength you have is to have the lowest cost of production. We think we now have that. There's still companies that are working on bringing their costs down. They're not all going to go about in the same pathways that we went, but really our recent Equitrans acquisition solidifies our being a low-cost producer. So we have the opportunity and the ability now to kind of be even more opportunistic. And really, if we look at things all the time, if it strengthens our company, if it lowers our break even, if it makes us a more sustainable, healthy, profitable company, yeah, we'll look at it. But we think we've checked the box on, we are now a company that we can see thriving for decades to come.

JB: Great. Well, thank you so much for being here at Gastech. Really appreciate it. To read and watch more, please visit online at hartenergy.com.

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