Scramble for gas assets pushes dealmaking to decade high
Spending on US projects has soared as national oil companies and traders add to the rush for gas assets
Soaring demand for natural gas among energy majors and investors has pushed dealmaking to its highest level in more than a decade, with buyers competing over the limited number of global assets available.
More than $32bn was spent on buying gas production projects in the first six months of the year, the highest level in over a decade, according to industry consultants Wood Mackenzie.
The frenzy combined with the conflict in the Middle East has also pushed up the valuations of gas assets in other regions such as North and South America, as investors push majors to add upstream output and the Gulf’s national oil companies try to invest outside their home markets.
This year gas-focused upstream deals have been struck at an average premium of 21 per cent to Wood Mackenzie’s own valuations, the highest since 2013.
The biggest deal by far in the first half of 2026 was Shell’s acquisition of Canadian shale producer ARC Resources for $16.4bn, its largest since buying BG a decade ago.
The appeal of gas assets has been reinforced by the structural outlook for global energy.
The International Energy Agency expects gas demand growth to outstrip oil if current policies continue. In a scenario in which governments commit to tougher climate policies, the IEA said gas demand would stop rising in 2035 but remain above current levels for decades.
The US-Iran war had also helped boost the case for gas investments, said Greig Aitken, director of corporate and M&A research at Wood Mackenzie. More buyers had entered the sector “which has intensified competition and inevitably leads to more robust pricing assumptions, betting that the demand outlook keeps supporting it”, he said.
The Middle East’s biggest oil producers had already started looking for gas assets outside the region in an effort to diversify their portfolios before the conflict began.
XRG, the overseas investment arm of Abu Dhabi’s Adnoc, has gas assets in Texas, Mozambique and Turkmenistan and signed deals to add projects in Azerbaijan, Argentina and Venezuela. XRG intends to invest tens of billions of dollars building its US gas business.
The US is also central to Saudi Aramco’s international gas growth plans. It agreed to invest in Texas’s Port Arthur LNG project and gained a foothold in several international LNG projects through its stake in MidOcean Energy, an LNG company created by EIG.
Japanese companies have been particularly heavy investors in US shale because they need LNG to meet their energy requirements and want to exert greater control over the resources they rely on.
Together, Japanese groups hold 36 per cent of production at the Haynesville shale basin, which stretches from east Texas to north-west Louisiana, according to Wood Mackenzie.
Commodity trader Gunvor has made a series of bets on US gas, most recently entering talks to buy more than $1bn of gas-producing assets in the Haynesville basin. A spokesperson for Gunvor declined to comment.
In terms of overall spending, the US gas sector is booming. About $30bn was spent developing unconventional gas resources in North America in the first half of the year, triple the three-year average, said Wood Mackenzie.
The US-Iran war has increased demand for North American liquefied natural gas as rival producer Qatar has endured six months of threats to ships carrying its LNG through the Strait of Hormuz and a cut to capacity after Iranian missile attacks on export infrastructure.
Coupled with rising demand from importers in Europe and Asia ahead of the peak winter demand season, this has raised the price of LNG cargoes from the US to its highest level in nearly four years.
LNG from the US Gulf Coast was valued at $21.98 per million British thermal units on Thursday, according to Spark Commodities. This was 4.4 per cent higher than the previous week and its highest valuation since December 2022.
LNG prices are tracking European hub prices closely. The European benchmark surged to over €70 per megawatt hour on Friday for only the second time in the US-Iran conflict.
But while war in the Middle East is raising demand for gas supplies elsewhere, over the long term it may dent consumption if prices stay high for too long, as this may deter price-sensitive buyers. Appetite for producing assets could fall as a result.
“We’re starting to see certain countries — in Asia in particular — where governments are being a bit more conservative with their ambitions on expanding their reliance on gas and maybe pivoting more towards renewables or even slowing down the phaseout of coal-fired plants,” said Livia Gallarati, global head of gas at Energy Aspects.