Appalachian natural gas forward prices sit near all-time highs, with winter 2026/27 basis at Eastern Gas South and Texas Eastern M-2 approaching 2024 records. NGI expects further upside as new pipeline capacity nears service and eastern storage builds.
Forward prices at key Appalachian locations, already near all-time highs, are set for further upside according to NGI’s Forward Look. In Monday trading, Eastern Gas South averaged minus 58.5 cents/MMBtu for the winter 2026/27 strip, while the Texas Eastern M-2, 30 Receipt winter strip averaged minus 43.1 cents. Summer basis prices averaged minus 81.0 cents and minus 80.6 cents at the two locations, respectively.
That strength is approaching levels last seen in 2024, when the Texas Eastern M-2, 30 Receipt winter 2024/25 strip hit a prior basis high of minus 42.4 cents and the summer 2024 strip reached minus 70.3 cents. Eastern Gas South also set records that year, averaging minus 52.2 cents for the winter and minus 68.5 cents for the summer.
New pipelines could push basis higher
More upside is likely as new pipeline capacity reaches the market. Transcontinental Gas Pipe Line’s Southeast Supply Enhancement project could enter service late this year or early 2027, adding around 2.4 Bcf/d of capacity to North Carolina and beyond. Mountain Valley Pipeline’s 500 MMcf/d Southgate Amendment Project could follow in 2028, and both operators have further projects in the works.
Henry Hub tells a weaker story
The Appalachian strength contrasts with softer benchmark pricing. NGI’s Henry Hub forward fixed price for winter 2026/27 was $3.616 in Monday trading, while the summer 2027 strip averaged $3.059. Those figures are not the lowest in recent years, however — the summer 2024 strip averaged $2.186 and the winter 2023/24 strip averaged $2.664. A low Henry Hub price does not guarantee a correspondingly high basis, as the 2024/25 winter showed when Henry Hub hit $3.425 alongside the region’s strongest strips.
Appalachian natural gas production averaged around 39 Bcf/d from January to April, per the US Energy Information Administration. Eastern storage has kept building despite the heat, with stocks rising to 600 Bcf as of July 3. More robust injections in the coming weeks could tighten the basis spread further between Appalachia and Henry Hub.
Source: Natural Gas Intelligence
Trading involves risk.
Risk Disclaimer
