Lots of Questions. Few Hard Answers.

Research evidence excerpt

Lots of Questions. Few Hard Answers.

Energy

Equity Research

June 21, 2026

Houston LNG Dinner (Continued). Past potential projected oversupply periods have been efficiently

absorbed by the market and the coming wave of supply has been consistently moved to the right. In

addition, a key factor in potential shut ins is the largely flat cost curve for US LNG leading to potentially

all or nothing dynamic (though port fees & transit times create some curve) and the approximately

one-month lead time off-takers need to provide when opting to not lift a cargo. Beyond the medium-

term supply-demand balance, participants spoke to contracting & project development dynamics.

Returns for project developers are extremely thin with third party equity investment often required and

returns primarily generated on uncontracted volumes (incl commissioning volumes) vs contracted

volumes. Fixed fees will need to move higher to ~$3/mmbtu to incentivize greenfield projects, in line

with Cheniere’s commentary at Kiawah (LINK), but competition and lower fee SPAs (primarily from

VG) could continue to put downward pressure. Prospective LNG project competition for tier one EPC

providers will accelerate especially due to competition from data centers. While participants noted

greater attention to energy security post-Iran War, some LNG end users remain on the sidelines for LT

contracts waiting to see if pricing goes lower at the end of the decade. Recent FIDs have been primarily

supported by portfolio players & trading houses. The market uncertainty around the return of the Qatari

trains remains pervasive with some questioning whether retrofitting a new cold box into an existing

train is a workable solution for a repair or if QatarEnergies will instead accelerate expansion projects