Haynesville Draws International Interest

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

By percentage, natural gas production is expanding in the Haynesville Shale faster than any other basin. That's enough to draw interest from international investors.

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Haynesville Booming

The Haynesville natural gas basin, which is situated largely in Louisiana, is the fastest-growing shale reserve in terms of percent, drawing investor interest from energy-hungry Japan.

In its NATGAS Today report for Friday, IIR Energy showed production climbing from late January levels, which were curtailed by the impacts from Winter Storm Fern. The production estimate for Friday of 109.6 billion cubic feet (Bcf) is above both January levels of about 108.3 billion cubic feet per day (Bcf/d) and year-ago levels of 105.6 Bcf/d.

Much of the production came from Northeast and Southeast regions, home to the Appalachia and Haynesville plays, respectively. Industrial Info's estimate for Pennsylvania, parked over the Appalachian Shale, was 21.4 Bcf, while Louisiana took 11.5 Bcf from the Haynesville play.

Though the Appalachia far overshadows Haynesville in terms of production, annual gains are greater for the southern basin percentagewise. Federal estimates point to a 1.6% increase from Appalachia and 9.3% for Haynesville.

The federal government expects total U.S. natural gas production to set a record in both 2026 and 2027.

By the Numbers

• 200 undeveloped locations in Haynesville for JERA
• 9.3% annual increase in the shale basin's gas production expected
• 3 MPTA from Cameron LNG facility in Louisiana

Enter Japan

On Thursday, the U.S. subsidiary of Japanese power company JERA said it closed on an agreement with Williams and GEP Haynesville II, LLC to acquire 100% of their respective interests in the Haynesville Shale in western Louisiana.

"Louisiana is a strategic priority for JERA, and the Haynesville acquisition--in addition to our other commitments across the state--and underscores our intention to be a long-term partner in Louisiana's energy economy," John O'Brien, the chief executive officer of JERA Americas, said Thursday.

Tapping some 200 undeveloped locations, JERA said it believes the assets in question can produce more than 500 million cubic feet of natural gas per day. Future investments could bring production to 1 Bcf/d, the company said.

JERA's portfolio includes offtake agreements for liquefied natural gas, presumably for Japanese deliveries as the island nation has few natural resources of its own. The company has a long-term arrangement to secure 1.2 million tons per annum (MTPA) from the Cameron LNG facility under development, and could secure an additional 3 MTPA from Louisiana.

California-based Sempra Energy is the lead company behind the project. Slated for completion by 2029, Cameron is designed for 6.75 MTPA from a floating liquefaction unit off the coast of Hackberry, Louisiana.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Project and Plant databases can learn more about Cameron LNG--including capacities, investment values and necessary equipment--in a detailed project report.

JERA is not alone among Japanese companies working in U.S. shale. Mitsubishi expects to close on a $5.2 billion deal to acquire the holdings of Aethon Energy Management no later than June. Mitsubishi said Haynesville gas supports Cameron, with part of this volume considered for exports as LNG to Asia, including Japan.

Tokyo Gas, however, sold off its entire stake in subsidiary TG Natural Resources to Grayrock Energy in November for $255 million. The subsidiary acquired assets primarily in the Haynesville Basin from Range Resources in 2020.

Key Takeaways

• Haynesville gas accelerating
• Japanese players gaining interest
• Louisiana gas feeding U.S. LNG boom

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).