EQT Corp. (NYSE: EQT) said Thursday that it may take a shareholding an export project for liquefied natural gasas it seeks to exploit the booming global demand for LNG with Russian threats causing European gas prices to fluctuate wildly.
“We are currently in discussions with LNG end users across different geographic areas and are considering investing in LNG export facilities,” CEO Toby Rice said in an earnings conference.
Current US Henry Hub natural gas prices have risen from historic levels, but prices of delivered LNG in Europe and Asia have risen ~ 3x higher than a year ago, and the EQT will seek to capture the strong margins between domestic feed gas and higher spot prices for delivered cargo to end-user markets.
“Our ultimate price, which we are looking for here at EQT, is to gain exposure to international markets,” Rice said during the call. “One of the ways we’ll have more flexibility in accessing these contracts is by investing in the LNG plant itself.”
Longer-term supply agreements will allow EQT to directly benefit from higher gas prices abroad while reducing buyers’ exposure to extreme volatility, the CEO said.
EQT shares rose 2.6% in Thursday’s trading after the company missed earnings in the first quarter by a wide margin, but raised expectations for free cash flow for the full year by 50%.