Key facts
- Global LNG supply is disrupted by ongoing tensions around the Strait of Hormuz.
- QatarEnergy extended force majeure on LNG deliveries through November.
- Venture Global's second-quarter net income rose 266% to $1.3 billion.
- APA Corp. sold natural gas at an average of negative $2.20 per Mcf in the U.S. during the second quarter.
- Equinor realized $15.79 per MMBtu for piped gas in Europe in the second quarter.
- Gas prices in Europe and Asia reached multi-year highs in September.
Ongoing geopolitical tensions around the Strait of Hormuz are significantly disrupting global liquefied natural gas (LNG) flows, creating opportunities for select U.S. natural gas companies. The Strait, a critical chokepoint for energy shipments, has seen reduced traffic following an attack on Qatar's Ras Laffan complex in March, which knocked out 17% of the country's LNG export capacity. QatarEnergy has extended force majeure on its LNG deliveries through the end of November, and flows through the Strait are down more than 75% from prewar levels.
This disruption has led to a surge in gas prices in Europe and Asia, reaching their highest levels since the 2022-2023 energy crisis in September. In contrast, U.S. domestic prices at Henry Hub have remained low, around $3 per MMBtu.
Cheniere, a major U.S. LNG exporter, has benefited directly, shipping more LNG than a year ago and raising its 2026 guidance for the second consecutive quarter. Venture Global Inc., despite a challenging start on public markets, has seen its net income jump 266% to $1.3 billion in the second quarter on $4.6 billion in revenue. The company's business model, which focuses on selling into the spot market, has proven advantageous in the current environment. Venture Global also secured a long-term deal with ConocoPhillips for 1 million tonnes a year starting in 2030.
APA Corp. is also positioned to benefit, largely due to a pre-war contract with Cheniere that pegs its sales to international LNG benchmarks. While APA's U.S. production faced negative pricing in the second quarter due to pipeline constraints, its LNG-linked contract and firm transportation business are expected to generate significant cash flow.
Golar LNG, a provider of floating liquefaction vessels, has ordered a new $2.45 billion unit, betting on demand for flexible LNG capacity. Its existing vessel, the Hilli, has generated substantial earnings, though its contract ended in July, placing it in a shipyard during a strong market.
Equinor ASA, a Norwegian energy company, is benefiting from pipeline gas sales to Europe, which command significantly higher prices than U.S. gas. Its European gas realized $15.79 per MMBtu in the second quarter, compared to $1.96 for its U.S. gas. Equinor's trading operations also provided a windfall, nearly doubling its usual quarterly results.