Wood Mackenzie Projects Henry Hub at $5 by 2035 as AI Demand and LNG Exports Squeeze the US Gas Surplus

Wood Mackenzie published a natural gas outlook on July 5, 2026, projecting Henry Hub prices will climb toward $5 per MMBtu by 2035. The firm cites three structural forces: US LNG export capacity nearly doubling by 2031, AI data centers requiring an additional 17 billion cubic feet per day by the mid-2030s, and declining productivity gains in US shale gas drilling. Henry Hub was trading at $3.19 per MMBtu on July 6, down 1.80% on the day, per CME front-month data. Kristy Kramer, Wood Mackenzie's Head of LNG Strategy and Market Development, and Charlie Riedl, Executive Director of the Center for Liquefied Natural Gas, are among the named contributors to the analysis.

The Henry Hub-TTF Spread: $11 Per MMBtu and What It Means

European TTF natural gas futures traded at EUR 44.82 per megawatt-hour on July 6, down 1.13% on the day and 10% below the prior month's levels, per TradingEconomics. Converting TTF to a common unit: at 3.412 MMBtu per MWh and a EUR/USD rate of approximately 1.08, TTF equates to roughly $14.19 per MMBtu. That puts the current Henry Hub-TTF spread at approximately $11.00 per MMBtu. At the US's current 15 Bcfd LNG export rate, that $11.00 spread represents roughly $165 million per day in gross arbitrage value moving from US production to European-priced buyers, a figure that explains the acceleration in US LNG infrastructure investment.

The spread has persisted because European gas storage cannot rebuild quickly enough after last year's supply disruptions. TTF is down 10% from last month but still 31% above year-ago levels, per TradingEconomics. US storage, by contrast, carried an injection of 87 billion cubic feet in the latest report week, leaving inventories 6.2% above historical norms. That divergence in storage fundamentals is what sustains the $11 spread even as both markets trade lower on the day.

US LNG Export Growth: From 0.5 Bcfd to 18 Bcfd in a Decade

US liquefied natural gas exports grew from 0.5 billion cubic feet per day in 2016 to 15 Bcfd in 2025, according to Wood Mackenzie. The projected 2027 figure is 18.1 Bcfd, and capacity is expected to nearly double again by 2031. Cheniere Energy's Sabine Pass terminal in Cameron Parish, Louisiana, the world's largest LNG export facility, anchors the US export complex with six operating liquefaction trains. Venture Global LNG's Calcasieu Pass facility in Louisiana adds a second major export hub, and Sempra Infrastructure's Cameron LNG operates a joint venture in which TotalEnergies holds a 16.6% stake alongside Mitsui and other partners.

The Global Energy Monitor's Global Oil and Gas Plant Tracker, cited in the Wood Mackenzie analysis, documents the pace of new US project sanctions. Several facilities under construction will push the US past Qatar as the world's largest LNG exporter on a capacity basis before 2030. As Oil Authority reported, ADNOC's trading subsidiary XRG acquired equity stakes in Rio Grande LNG Trains 4 and 5 from BlackRock's GIP, signaling that Gulf state national oil companies now regard US LNG terminals as strategic assets worth owning directly.

Germany's Canadian LNG Deal and the Cargo Swap Reality

Germany's SEFE, the former Gazprom Germania entity now majority-owned by the German government, signed a binding agreement for 1 million tonnes per year of LNG from Canada's Ksi Lisims project for up to 20 years. Uniper, another German utility, holds a preliminary letter of intent for 2 million tonnes per year from the same project. Ksi Lisims LNG, a C$10 billion joint venture involving the Nisga'a Nation, Western LNG, Rockies LNG, Shell, and TotalEnergies, carries 12 million tonnes per year of planned capacity.

German buyers will likely receive their gas through cargo swaps rather than direct Pacific-to-Atlantic shipments. Canadian LNG Canada production at Kitimat, British Columbia, loads westward for Asian markets, Japan, South Korea, and Taiwan, while equivalent volumes from the US Gulf Coast, Qatar, Algeria, or Norway flow east to German import terminals. The net economics are the same for buyers, but Germany's physical dependence on American LNG deepens with each cargo swap cycle, since US Gulf Coast volumes are most frequently paired with Atlantic-basin German deliveries.

What Rising Henry Hub Prices Mean for German Importers

Wood Mackenzie's $5/MMBtu Henry Hub forecast for 2035 would add roughly $1.81 per MMBtu to German importers' cost base relative to today's $3.19 level, assuming liquefaction and shipping costs remain stable. TradingEconomics projects a 12-month Henry Hub price of $4.18 per MMBtu, a nearer-term step along the same trajectory. The firm's 12-month TTF forecast is EUR 56.74 per MWh, equivalent to roughly $17.96 per MMBtu at current EUR/USD, which would widen the Henry Hub-TTF spread from today's $11 to approximately $13.78 per MMBtu.

That widening spread, if it materializes, actually improves the economics for US LNG exporters in the near term. The long-run risk for German buyers is different: if Henry Hub approaches $5 per MMBtu while European TTF moderates as new capacity comes online, the spread compresses and delivered LNG costs rise even if TTF falls. Germany signed long-term US LNG contracts partly as a hedge against Russian gas dependency; those contracts now carry embedded exposure to Wood Mackenzie's $5 forecast.