Why Hormuz Cannot Be Fully Replaced, Especially for LNG
What happens on the other side of the world sometimes affects the Marcellus/Utica. So far, the Iran war has not affected prices (or demand) in the M-U for natural gas. However, if the war continues to drag on for months, it could potentially affect us by affecting the price of LNG on the world market. About one-fifth (20%) of global LNG trade depends on the Strait of Hormuz, with effectively no other way to get it out. Oil can, potentially, find other pathways out of the Persian Gulf (via overland pipelines). But such is not the case with LNG from Qatar. Read More “Why Hormuz Cannot Be Fully Replaced, Especially for LNG”

You’ve seen the headlines and maybe read the news that “Qatar supplies 20 percent of the world’s LNG.” Iran bombed Qatar’s LNG export facility in early March and took it offline. The world press had a stroke, predicting a natural gas Armageddon without 20% of LNG coming from Qatar. But what’s this? U.S. LNG exporters “have so far offset the drop in shipments from Qatar following Iranian attacks on its facilities” and the closure of Hormuz. We’ve been able to make up for the lost exports from Qatar.
On Monday, President Donald Trump invoked the Defense Production Act (DPA) to channel federal funding toward domestic energy projects, specifically targeting liquefied natural gas (LNG), petroleum, coal power, and grid infrastructure. Empowering the Energy Department to bypass regulatory and financial hurdles, the move aims to curb rising electricity and gasoline costs ahead of the midterm elections while meeting surging power demands from the AI industry. 
The U.S. Energy Information Administration (EIA) forecasts U.S. natural gas net exports will keep rising through 2027, driven by expanding LNG capacity and stronger pipeline shipments to Mexico. Net exports are projected to reach 18.7 Bcf/d in 2026 and 20.5 Bcf/d in 2027. LNG exports should average 17.0 Bcf/d in 2026, then climb again in 2027 as new projects, including Corpus Christi, Golden Pass, Port Arthur, and Rio Grande, ramp up. Europe remains the leading destination, while Mexico’s power and LNG growth support pipeline demand. Imports stay minimal, and reduced Canadian imports reflect new Canadian LNG projects and rising Appalachian production serving Northeast markets.
The Philadelphia Gas Commission postponed a vote on Philadelphia Gas Works’ (PGW) $182 million proposal to replace and expand its natural gas liquefier (LNG plant) in Port Richmond. The commission’s staff and the Public Advocate recommended rejecting the project, arguing it was oversized and could burden customers with unnecessary debt. They also cited incomplete plant and project designs. PGW argued the upgrade is crucial for safety and affordability, preventing potential harm to customers during cold winters and avoiding the need to truck in liquefied natural gas. 
Venture Global (VG) and Edison S.p.A., an Italian electric utility company headquartered in Milan, have signed a commercial agreement to fully resolve their pending arbitration regarding the Calcasieu Pass LNG project. Expected to conclude by the end of Q2 2026, the settlement terminates all legal disputes between the companies. As part of the deal, VG will deliver additional LNG cargoes to Europe, specifically targeting the Italian market through the Adriatic LNG Terminal starting in May 2026. This agreement strengthens their long-term partnership and enhances Italy’s energy security amidst global geopolitical disruptions.
Morningstar DBRS has published an interesting commentary that will be of interest to MDN readers and those with an interest in LNG: “From Risk to Relevance: Middle East Disruption Elevates North American LNG.” The escalating conflict in the Middle East has disrupted global LNG supply, damaged infrastructure in Qatar, and constrained shipping. These developments have heightened buyer concerns around supply security and transit risk, prompting a reassessment of LNG sourcing strategies. As a result, North American LNG has gained strategic relevance (preference), supported by jurisdictional stability and expanding export capacity.