BofA Securities analyst provided a 2025/26 outlook on the Integrated, Refining, and Midstream sectors.
The analyst writes that since the start of the year, the 2025 and 2026 gas curves have risen by approximately 90c and 50c, respectively, largely driven by colder-than-usual winter conditions.
The analyst has identified three key factors that could present a more bullish outlook over the next 12-18 months than the market currently anticipates.
The analyst notes that the Waha price strip for 2025 has widened over the past month, signaling gas egress constraints.
The Matterhorn pipeline, now flowing 1.75 bcfd since October 2024, may need more compression or connections to reach its 2.5 bcfd capacity later this year, adds the analyst.
Also, with three new pipelines delayed until late 2026, Permian growth could be limited to 750 mmcfd instead of the forecasted 2.5 bcfd over the next 12-18 months. This restricted supply at Waha is a bullish factor for Henry Hub gas prices, says the analyst.
The analyst writes that Venture Global, Inc. (NYSE:VG) has reached 2 bcfd from Plaquemines just three months into ramp-up, with a target of ~3.8 bcfd by year-end—exceeding expectations.
Meanwhile, Cheniere Energy, Inc.‘s (NYSE:LNG) CCS3 ramp is slightly ahead of projections, while Golden Pass may be delayed to 2026, adds the analyst.
The analyst says that LNG Canada, on track for mid-2025, could divert gas from the U.S.
Overall, LNG demand at the 2025 exit rate is now estimated to be 1.6 bcfd higher than initially projected, adds the analyst.
The analyst notes that they are still drawing DUCs down to maintain Haynesville production at ~14 bcfd with the current rig count but expects it to reach a steady-state level (~4 months’ worth) by the second half of 2025.
With the Permian and Appalachia maxed out, an additional 2.5 bcfd will be needed by 2026, requiring Haynesville to ramp up to ~50 rigs by year-end, adds the analyst.
If Haynesville gas growth doesn't materialize, storage levels could be critically low by spring 2026, potentially driving gas prices significantly higher, writes the analyst.
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