Nissa
Darbonne
Oil and Gas Investor
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Demand is aligned for an upside year for U.S. natural gas producers in 2025 as LNG export capacity expansions underway for years add to the daily draw. And forecasts for some 50 gigawatts (GW) of additional U.S. dispatchable power generation for AI data centers have appeared in just the past six months.

By mid-January, the prompt-month contract was $3.98/MMBtu and the 12-month strip was $3.83/MMBtu.

A year earlier, the prompt-month price was $3.10/MMBtu and the strip was $3.02/MMBtu.

LNG exports

LNG exports of some 13.5 Bcf/d in late December may grow to 16.1 Bcf/d in this quarter as Venture Global reaches full capacity at its newest plant—Plaquemines on the Mississippi River south of New Orleans.

The LNG operator’s first shipment left the dock in late December on its Venture Bayou tanker, unloading at Wilhelmshaven, Germany, in early January, and was en route to Louisiana for a reload on Jan. 12.

Another of Venture Global’s tankers, Venture Gator, was en route to Europe in early January. The LNG producer bought the two tankers in July from Astra Ltd.

Meanwhile, Isabella was loading. And Flex Rainbow was anchored at the Mississippi’s mouth, waiting its turn to load.

Gazprom’s contract to deliver gas to Ukraine expired at year-end. Three years after Russia’s invasion of the country, Europe is nonplussed without Russia’s gas. The LNG price delivered to The Netherlands (Dutch TTF) was about $14/MMBtu.

And Europe’s outlook is positive. Futures contracts for LNG priced at the TTF are backwardated, declining to $11 into the winter of 2028-2029.

Venture Global’s Plaquemines plant has FERC approval to 3.3 Bcf/d. It currently is operating at 2.63 Bcf/d, according to Venture Global.

Separately, Exxon Mobil’s long-awaited Golden Pass LNG export plant on the Sabine River at the Texas-Louisiana border has Federal Energy Regulatory Commission approval to 2.6 Bcf/d. It is expected to load a first tanker later this year.

And Cheniere Energy’s expansion at Corpus Christi, Texas, began liquefaction in December. A first load is expected later this quarter. Full capacity from the seven-train expansion will be 1.3 Bcf/d, bringing the plant’s total output to more than 3.3 Bcf/d.

Data centers

Nuclear power generator Constellation Energy has put itself in front of answering new data-center electricity demand. First, it signed a deal with Microsoft Corp. to restart the Three Mile Island nuclear plant in 2028, which would put some 835 megawatts (MW) back onto the grid.

And in early January, Constellation signed a deal to buy gas-fired, privately held, Houston-based power generator Calpine Corp. for $29.1 billion, including debt assumption, for a combined generation capacity of more than 60 GW, becoming the largest U.S. power generator.

“It just seems like there’s a new story every day about the demand growth,” Joe Dominguez, Constellation president and CEO, told investors in a call about the deal in January.

“The fact of the matter is, demand for our products is expected to grow at levels we haven't seen in a lifetime. We can all raise questions about the ultimate magnitude of these increases. Do we believe all of it’s real?

“It's hard to say, really. But let me offer a couple thoughts here. First, even if only half or one-third of this forecasted growth occurs, it’s a very big deal.”

Microsoft announced it will spend $80 billion on AI demand centers. “The demand is real,” Dominguez said.

The combined assets will be Constellation’s nuclear fleet and Calpine’s natural gas, geothermal and co-generation plants—all producers of power 24/7.

Data centers use “eye-popping amounts of power,” Maeghan Rouch, a Bain & Co. partner, reported this past fall. “Serving a 1 GW data center requires the capacity of about four natural gas plants or around half of a [two-reactor] large nuclear plant.”

Microsoft’s plans alone are expected to call for 5 GW—and all 24/7 power.

Analysts’ projections are generally for an average of 50 GW call for additional power supply.

Adjacent to the Haynesville Shale play, two power producers announced new gas-fired fleet expansions in December.

Swepco plans to build a 450 MW plant in Harrison County, Texas, and convert a 1 GW plant from coal to gas nearby in Morris County. Both are in the Southwest Power Pool, outside Texas’ ERCOT grid.

Just east of the Haynesville, Entergy announced three newbuild combined-cycle turbines with a combined capacity of 2.32 GW, with two of these in Richland Parish in North Louisiana.

The plants are to power Meta’s $10 billion data center, its largest to date, in the parish.

Winter

As of Jan. 12, most of the U.S. had been below 32 degrees for seven days already in Winter Storm Blair. And the 10-day forecast expected 10 more days of this as Winter Storm Cora immediately followed Blair just as the Deep South had found a one-day reprieve in the 50s.

The first sub-freezing week’s gas-draw data was to be released by the Energy Information Administration (EIA) on Jan. 16.

Winter gas draws had already brought the supply overage to par with a year ago—about 3.3 Tcf—but remained about 0.2 Tcf greater than the five-year average.

The gas draw due to Blair was anticipated to gain a ranking among the biggest. At No. 1 was a 2018 draw of 359 Bcf; No. 2, the 338 Bcf draw in 2021 that would have been larger had Texas had electricity that week; and No. 3, the 326 Bcf of a year ago.

Editor’s note: Since mid-January, U.S. natural gas in storage was drawn down to 2.4 Tcf through Jan. 31, coming in 8% below the year-before storage level and 4.4% below the five-year average, according to a Feb. 6 report from the EIA.

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