North America gas long-term outlook H2 2019 data: Capital discipline leads to a higher price floor

In 2019, record US gas production has increased downward pressure on Henry Hub prices. Our latest long-term outlook sees this production growing more measured in the next decade, and this is met by a slower LNG export build and lower near-term gas power burns, leading to a higher price floor in the early 2020s: around $2.50/mmbtu. Ultimately, the global appetite for North American LNG remains strong, and the call on it increases just as associated gas production plateaus, buffeting prices beyond $3.00/mmbtu by 2030 and $4.00/mmbtu by 2038. Throughout this update, you’ll note five themes: • Producers are responding to pressure to exhibit greater capital discipline. • The dynamic between associated gasand its non-associated gas rivals has once again shifted, creating a tale of two supplies. • LNG will reach the same ultimate export levels by 2040, but it has a slower build. • Gas’s power market share is reduced by the rise of renewables. • We anticipate increased infrastructure delays