U.S. natural gas producers are gearing up to boost output in 2025 after a year of production cuts, driven by rising demand from liquefied natural gas (LNG) export facilities that could lead to higher prices. In 2024, gas production saw a decline for the first time since the pandemic hit in 2020, when demand dropped, according to the U.S. Energy Information Administration (EIA).
Producers started scaling back gas production earlier this year when average spot prices at the Henry Hub benchmark fell to a 32-year low in March. In some markets, gas prices even dipped into negative territory, forcing producers to pay others just to take their product. But with export demand on the rise, analysts expect gas prices next year to jump more than 40% compared to 2024 levels.
The EIA predicts that annual average dry gas production will drop slightly from 103.8 billion cubic feet per day (bcfd) in 2023 to 103.3 bcfd in 2024, but will bounce back to 104.5 bcfd in 2025. On the demand side, total gas usage—including LNG and pipeline exports—is projected to rise from 109.9 bcfd in 2023 to 113.0 bcfd in 2025. Most of this increase will come from a 14% surge in LNG exports, while domestic gas use, such as for power generation, is likely to dip.
Since 2019, U.S. LNG exports have been soaring, growing by an average of 34% each year. Meanwhile, domestic gas consumption has inched up by just 2% annually. Two new LNG facilities are set to come online soon—the first phase of Venture Global’s Plaquemines plant in Louisiana and the Stage 3 expansion at Cheniere Energy’s Corpus Christi plant in Texas. Both projects will add significant capacity by the end of this year.
With export demand climbing, several major U.S. gas producers announced in their third-quarter earnings that they’re planning to boost output starting in the fourth quarter of this year and continuing into 2025. Bank of America analysts noted that higher prices and the upcoming start-up of Plaquemines and Corpus Christi Stage 3 could lead to “much higher flows next year.”
Analysts forecast that average annual Henry Hub prices will rise to around $3.27 per million British thermal units in 2025, a jump from a low of $2.29 in 2024. Coterra Energy CEO Thomas Jorden highlighted the combination of rising LNG exports, increased demand for gas-fired power generation, and the possibility of a cold winter as factors tightening the supply-demand balance for natural gas in 2025. However, Jorden emphasized that Coterra would only boost production once spot gas prices significantly improve.
EQT, the nation’s second-largest gas producer, increased its production guidance for the fourth quarter, while EOG Resources expects its U.S. gas output to rise from 1.745 bcfd in the third quarter to between 1.800 and 1.850 bcfd in the fourth quarter. Expand Energy, the largest U.S. gas producer following the merger of Chesapeake Energy and Southwestern Energy, indicated it could increase production to about 7 bcfd in 2025, depending on market conditions. Expand’s approach is to “prudently activate production as market conditions warrant,” with plans to deliver an additional 1.0 bcfd of capacity by the end of 2024 if needed.
Overall, 2025 is shaping up to be a year of renewed growth for U.S. natural gas producers, fueled by export demand and rising prices. But the extent of that growth will depend heavily on market dynamics and whether the industry sees sustained improvement in gas prices.
