The 2028 Gas Squeeze
Joe Morrissey@morrisseyjoe
+3.0%
since Oct 6
Practiced to +0.9% over 3 days before going real.
Practice chapter: simulated results; no money was invested.
The idea
I believe AI data centers and LNG export terminals will out-demand US natural gas supply starting around 2028, draining storage by 2030 and making gas prices convex to the upside while the market still treats gas as range-bound. To express this I own unhedged gas-pure producers, the pipelines and compression equipment that move gas to demand, futures and royalty exposure for direct price torque, and a nuclear generator that benefits when gas sets the power price.
What it owns
- Gas-focused drillers with minimal hedging capture nearly all upside when prices spike, making them the most leveraged to a supply squeeze. · EQT CorporationAs the largest US gas producer, it flows higher prices directly through massive unhedged volumes when demand from data centers and LNG terminals outpaces supply., Antero ResourcesIt sells largely unhedged production at LNG-linked prices, capturing full convexity if storage drains and prices spike through the end of the decade., Expand EnergyOperating in both Appalachia and Haynesville, it sells growing volumes into higher prices from the two basins feeding AI and LNG demand., Comstock ResourcesThis leveraged Haynesville producer gains the highest percentage per dollar of price rise, maximizing exposure if gas prices actually move., Range ResourcesIt holds decades of low-cost Marcellus inventory that gets repriced upward when the market stops treating gas prices as range-bound., CNX ResourcesIt is a low-cost Appalachia producer that makes money before the squeeze arrives and much more after, offering defensive exposure to the group., Gulfport EnergyAs a small-cap unhedged gas producer, it swings more than large peers when prices rise, making it the highest-volatility bet on the squeeze.38%
- Pipeline and storage operators earn more as data centers and LNG export terminals pull higher volumes through their systems. · Williams CompaniesIt owns Transco, the primary pipeline moving gas toward data centers and export terminals, earning higher fees as volumes grow., Kinder MorganIts Gulf Coast network feeds LNG terminals and gains higher transport fees as export and power demand grow toward the end of the decade., Energy TransferIt is signing supply agreements to feed gas directly to data centers, turning demand growth into long-term contracted volumes and fees., DT MidstreamIt is a pure-play gas pipeline company with Haynesville-to-Gulf connections, the cleanest pipes-only way to own the delivery bottleneck.19%
- Futures, royalties, and broad gas baskets rise with the commodity price itself, stripped of drilling costs and hedges. · United States Natural Gas FundIt holds gas futures directly, capturing pure convexity if working storage drains and prices spike, though rolling costs require the squeeze to materialize., First Trust Natural Gas ETFThis ETF holds the broad gas producer group, catching winners a single-stock strategy might miss if the whole sector lifts on a structural deficit., Black Stone MineralsIt collects royalties on Haynesville gas with no drilling costs of its own, gaining full price torque without cost inflation eating margins.14%
- Compression, frac, and well-service suppliers gain pricing power when production capacity runs short and demand surges. · ArchrockIt rents the compression horsepower moving gas through pipes, and capacity is already tight, so day rates rise before prices do when volumes surge., Kodiak Gas ServicesIt owns large-horsepower compression units the Haynesville and Gulf Coast depend on most, capturing pricing power when gas volumes must grow., Liberty EnergyIt provides the frac capacity producers will compete for when drilling responds to high gas prices, gaining equipment pricing power as activity picks up., Baker HughesIt sells liquefaction and turbomachinery equipment every new LNG terminal needs, getting paid on the export buildout regardless of gas prices.14%
- Non-gas power generators and LNG exporters pocket the margin when expensive gas sets the power price, without commodity exposure. · Constellation EnergyIts nuclear fleet has near-zero fuel cost, so every dollar of expensive gas on the power market drops straight to margins without touching its costs., Cheniere EnergyIt earns mostly fixed fees on long-term export contracts, collecting on demand without owning the commodity itself.8%
- Cash7%