While resource scale, cost efficiencies and access to mountains of drilling capital peppered BHP Billiton chief executive Marius Kloppers’ justification of its $15-billion acquisition of Petrohawk Energy Corp. in a call to investors, one word stood out: feedstock. Feedstock for what? Future power generation. Gas-to-liquids for transportation fuel. And LNG supply across the globe. Said Kloppers, as “the world becomes a smaller place, more arbitrage opportunities exist.”

Are majors quietly stockpiling U.S. shale gas for a future world of significantly increased demand? It could be happening, says Global Hunter Securities analyst Michael Bodino, who also suggests the integrated energy companies need gas supply to improve profitability of petrochemical operations.

Taking into account the long cycle times preferred by majors, “it’s hard to come up with a scenario where they don’t win” by stockpiling gas assets, he says, “either through a function of rising demand, falling supply, or a combination.”

Yet this development could lead to “drilling through the cycle,” note Wells Fargo analysts Michael Hall and David Tameron, a bitter cry of gas bears as natural gas prices remain soft. It’s true, BHP is expanding Petrohawk’s budget from $4 billion to $5 billion by 2015 and another $1.5 billion into 2020. “The acceleration of volumes is enormous,” said BHP Billiton Petroleum president Mike Yeager.

Is a steady drumbeat of gas production by tone-deaf majors pushing volumes from North American shales a bad thing? On the surface it seems so, tamping down natural gas prices in the near term.

But the Wells Fargo analysts suggest such consistency of production by majors dominating shale-gas reserves will reduce gas-price volatility, ultimately leading to greater demand. And while the analysts don’t portend a robust outbound LNG market in the near term, “we do believe these sorts of transactions increase the likelihood of a more globalized gas market developing over the longer term.

“The increased participation of global resource players stands to only further accelerate the potential closing of the significant MMbtu arbitrage gap that exists between gas and oil.”

Adds Bodino, “Unlike the one-trick pony that is a pure shale-gas company with nothing else to do but drill shale gas, you’ll probably get more balance in the market over time with large companies that have longer cycle times.”

-"Steve Toon"

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