AI, LNG demand may end cheap US gas era

The decade of cheap US natural gas may be nearing an end, with Wood Mackenzie forecasting Henry Hub prices to approach $5 per mmbtu in real terms by 2035, as AI-led data centre growth, gas-fired power demand and LNG exports tighten the market.

The forecast marks a significant reset for global gas markets as Henry Hub has been the pricing backbone for US LNG exports and long-term supply contracts. For most of the past decade, the benchmark remained in a $2-4 per mmbtu nominal range, aided by rapid shale development, near-zero-cost associated gas and steady productivity gains.