A glimpse of attributing factors through 2040
- Below $3/mmbtu until 2026
Although Henry Hub was looking to break $3/mmbtu over the summer, the scale of new Northeast pipelines unleashing Marcellus and Utica supply to the broader market and the exuberance of the Permian and other associated gas plays that continue to produce gas as a by-product, weighs heavily on our price forecast in the near- to medium-term. As such, expect Henry Hub prices to bottom out at $2.53/mmbtu in 2021 and not break the $3/mmbtu level until 2026.
- Between $3 and $4/mmbtu until the early 2030s
Expect Henry Hub prices to ascend towards $4/mmbtu by the early 2030s. This price escalation is a function of the next wave of LNG export projects such as LNG Canada and project development in the Gulf Coast, a structural shift in the power market with additional coal and nuclear reitrements, and resource exhaustion at a number of tight oil sub-plays in the Mid-Con, Eagle Ford and Montney.
- Approaching $5/mmbtu by 2040
By 2040, Henry Hub prices will reach $5/mmbtu, but with both opportunities and challenges. For the global buyers, North America will still remain an attractive source of supply as the global price spread still justifies LNG exports at this $5/mmbtu Henry Hub price level – reaching 23 bcfd by 2040.