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EQT's acquisition of Range underscores race to dominate US natgas market

By Reuters News

By Scott DiSavino

Oct 28 (Reuters) - EQT's EQT.N acquisition of rival producer Range Resources RRC.N this week marks the latest consolidation in the natural gas industry, as producers are scrambling to lock in supply to feed growing demand for liquefied natural gas exports and power demand.

Canonsburg, Pennsylvania-based EQT said on Monday it will buy Fort Worth, Texas-based Range Resources RRC.N in a $13 billion all-stock deal that will create the nation's biggest gas producer. EQT is the second-largest natural gas producer in the US.

"The Range transaction increases our market access to what we believe are the two premium markets in this world - domestically in Appalachia and on the international front with LNG," EQT CEO Toby Rice told Reuters in an interview following the deal.

He said it makes the company "the natural choice for gas supply domestically and around the world."

The deal underscores how top US gas producers are racing to consolidate ahead of what they expect will be a step-change in domestic demand, driven by new LNG export terminals coming online and a buildout of gas-fired power plants to supply electricity-hungry data centers — even as a near-term glut has depressed prices and forced operators to curtail output.

In Appalachia, where EQT and Range produce most of their gas, Rice said the company boosted its demand growth estimates for the region to over 25 billion cubic feet per day (bcfd) from a prior forecast of around 20 bcfd. One billion cubic feet is enough gas to supply about five million US homes for a day.

Rice said that about half of that demand growth would remain in the basin, supplying things like power plants to feed data centers, and the other half is for pipeline takeaway projects like EQT's Mountain Valley Boost project to move more gas from West Virginia to Virginia and its proposed POWER project to move more gas from Pennsylvania to Ohio.

On the international front, EQT has targeted having 15% of its gas sales exposed to international markets.

"Increasing our production base with Range is going to give us the ability to increase our LNG capacity, still maintain our 15% strategic target (and) increase our LNG exposure," Rice said, noting that now was "an incredibly attractive opportunity" since gas was currently trading below $4 per million British thermal units in the US but over $30 in Europe and Asia.

"Natural gas demand is inflecting in two directions at once (power for data centers and LNG exports) and EQT is the only Appalachian producer contracted into both," Melius Research analysts said in a note.

MORE TO COME

The EQT-Range merger follows Devon Energy's DVN.N merger with Coterra Energy in May 2026 to create the nation's third-biggest gas producer, and the merger of Chesapeake Energy and Southwestern Energy in October 2024 to create Expand Energy EXE.O, currently the nation's biggest gas producer.

About a third of US gas production comes from the Marcellus and Utica shale basins in Pennsylvania, Ohio and West Virginia in Appalachia.

"There's a number of logical ... combinations there that would likely occur over the next couple of years up in the Northeast ... I think it's a natural next step in consolidation," said Matthew Bernstein, vice president of North American oil and gas at energy research and consulting firm Rystad Energy.

Bernstein said Expand Energy could make a move to bolster its position in the Northeast, noting there were quite a few public players with production in Appalachia, including Antero Resources AR.N, CNX Resources CNX.N and National Fuel Gas' NFG.N Seneca Resources spinoff.

Officials at Expand, Antero and National Fuel Gas were not immediately available for comment. Officials at CNX said they do not comment on market speculation regarding mergers and acquisitions.

Analysts at Mizuho said in a note that they "continue to see gas-focused US shale assets getting concentrated in fewer hands ... This bodes well for capital discipline, especially as gas demand is expected to inflect starting in 2028 on LNG and AI data center/electrification power demand tailwinds."

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