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Commentary Outlook & Notes Market-Relevant Events Infrastructure Supply Chart Pack
Updated September 5, 2025
The TETCO M2 basis curve has weakened throughout August. Prompt price has fallen to it’s lowest level since early July, and is hovering near levels seen in October 2024. Although prompt month has fallen, Winter25/26 strip pricing is only $0.07 of it’s 32-month high. Gas production in the region has trended lower throughout the past few weeks, matching the YTD lows we saw in July and the beginning of August. This has resulted in more available Midwest and Southbound pipeline space, which has kept Winter25/26 basis pricing stable. Price action beyond the next winter strip has been more muted, with volatility mostly limited to the front of the curve.
The TETCO M2 forward curve has been relatively stable over the past few months, although basis prices have slightly weakened after reaching a one-year high in early August 2025. Price action is expected to be driven primarily by weather and regional production changes, with no significant changes to pipeline egress capacity over the next few years. Prices advanced in 2024 as producer curtailments, and the start-up of the Mountain Valley Pipeline led to higher available pipeline capacity. Over the next few years, there will be small increases in egress capacity from pipeline expansions. However, no major long-haul pipes are planned, and given the difficulty in getting MVP finished, they are unlikely.
TETCO M2 Basis Outlook and Notes
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Winter '24-'25
Mountain Valley Pipeline is now online
This helped relieve production congestion
Gas production is now at a new all-time high after falling sharply due to producer curtailments earlier in the year
Strong weather-driven demand in January and February supported prices
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Summer '25
Production always decreases in summer as local demand falls and pipeline maintenance begins
Cove Point LNG in Maryland goes down for yearly maintenance in October, reducing downstream demand for Appalachian gas
The final months of summer have the most price risk due to mild temperatures and limited pipeline
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Winter '25-'26 & Summer '26
Production growth could hit the limits of pipeline egress capacity again, weakening basis differentials
Typically, there is an inverse correlation between Henry Hub prices and Northeast basis; we hold a bullish view on NYMEX prices for this period, potentially weakening M2 and Dom South pricing
Egress capacity is not anticipated to increase by a material amount until 2028
High forward prices starting December 204 likely encourage higher production in Winter '25/'26
AEGIS observed large amounts of hedging from private companies
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For more discussion on basis price moves and the current forward curves:
For more discussion and charts, jump to our outlook and chart pack. Remember, the local market is influenced by the broader gas market. Consult our Gas Macro Outlook for more.
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Recent Market-Relevant Events
7.24.2025
EQT advancing over 1 Bcf/d in MVP expansion
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7.16.2025
EQT secures deal to supply 4.4 GW in Pennsylvania
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5.30.2025
Williams pursues revival of Constitution Pipeline and NESE
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The Appalachian Basin has suffered from a lack of pipeline egress capacity in the past several years as pipeline projects were delayed by permitting issues and court proceedings. After multiple years of delays, the Mountain Valley Pipeline finally entered service in 2024 after a Congressional deal. Downstream constraints on the Transcontinental pipeline materialized during MVPs construction, preventing the 2 Bcf/d pipe from flowing at full capacity. Expansions on Transco to resolve these constraints are planned for the next few years. A smaller project, Regional Energy Access, recently entered service (Fall 2024), increasing access to demand centers in the Northeast.
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For a discussion of production outlook:
Below are the most market-relevant infrastructure projects that appear to be funded and going forward. The projects that offer intra-region capacity (egress) are also shown in the chart above.
Note: Deeper discussion included below the map.
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Major Pipeline Exits From Appalachian Basin
Gas Pipeline Flows
Gas Pipeline Projects
Borealis Pipeline Project
In-service date: TBA
Capacity: 2 Bcf/d
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Source: S&P, AEGIS
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| TGT Borealis Project—On April 1, 2025, Boardwalk Pipelines announced a new Texas Gas Transmission pipeline expansion. The project involves a 2 Bcf/d greenfield line running from existing infrastructure in Lebanon, Ohio, to Clarington in eastern Ohio. No timeline has been given yet, but it's estimated that the line should enter service by the end of the decade. The project should result in higher productive capacity in the Marcellus and Utica. |
Mountain Valley Pipeline
In-service date: 2Q 2024
Capacity: 2.0 Bcf/d
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Source: Equitrans
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Mountain Valley Pipeline - MVP began flowing gas in June 2024, with a capacity of up to 2 Bcf/d. The pipeline ships gas from Equitrans' transmission and storage system in Wetzel County, West Virginia to Transco Station 165 in Pittsylvania County, Virginia.
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Regional Energy Access
In-service date: 4Q 2024
Capacity: 0.83 Bcf/d
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Source: Williams
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Regional Energy Access - Williams developed the Regional Energy Access project to enhance gas supply in the Northeast region. The project involves increasing compression, which should allow for an additional 829 MMcf/d to be shipped to New Jersey from Pennsylvania on the existing Transco pipeline. Opposition to the project is continuing in court despite the expansion already being placed into service.
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Mountain Valley Pipeline Southgate
In-service date: mid-2028
Capacity: 0.55 Bcf/d
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Source: Equitrans
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Mountain Valley Pipeline Southgate - The MVP Southgate extension initially proposed in 2018, abandoned, and now resurrected is a proposed project to connect MVP to demand centers in the Mid-Atlantic region. The line would extend 75 miles from the MVP terminus in Virginia to delivery points in Rockingham and Alamance Counties, North Carolina.
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Other Projects
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Transco Expansions - Numerous smaller expansions to the Transcontinental pipeline are planned for the next few years through 2028. While many of these projects are in the Southeast US, they will help alleviate downstream constraints, allowing for additional Appalachian production to flow, especially on the recently started Mountain Valley Pipeline.
MVP Expansion - EQT is advancing two major expansions of the Mountain Valley Pipeline, totaling 1.05 Bcf/d of new takeaway for Appalachian natural gas. The MVP Boost expansion is expected to increase capacity on the pipeline to 2.5 Bcf/d with an in-service date of 2028. EQT is also advancing the MVP Southgate Project, which would add another 550 MMcf/d to the system by 2028
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Local Supply
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Production growth should remain limited in the next few years. The Appalachian basin has long been constrained by a lack of pipeline egress, with this likely continuing into the future. As expansions on Transco are completed, Mountain Valley Pipeline can flow at full capacity, with this new capacity likely being filled by production relatively quickly. Output in the region fell sharply in 2024 as low prices forced producer curtailments. Gas production in the area can flex during times of higher demand, such as peak winter months when increased consumption allows for higher pipeline egress, while the yearly Cove Point LNG maintenance often coincides with a drop in production.
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Operator Guidance
EQT (Q2 2025 EC)
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07/23/2025
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2025 Guidance:
Production: 2,300–2,400 Bcfe (includes ~100 Bcfe from Olympus in 2H)
CapEx: Maintained at $2.3B–$2.45B despite Olympus; capital efficiencies offset added spend
Operating Costs: Lowered by $0.06/Mcfe due to synergy and performance
Free Cash Flow: $240M in Q2 ($375M ex-litigation cost); nearly $2B FCF over last 3 quarters
Midstream Growth: $1B CapEx through 2029; forecasted $250M recurring FCF by 2029
Debt Reduction: Net debt down to $7.8B; target $7.5B by YE 2025, long-term goal ≤$5B
Drilling & Basin Activity Appalachia:
Wells Turned Online: Record D&C efficiency; new footage/day record in Q2
Well Cost Improvements: Single-digit % cost reduction YoY; compression uplift >2x expected
Olympus Acquisition: 90k net acres; 500 MMcf/d; integrated rapidly; Deep Utica adds long-term inventory
Production Strategy: 2 Bcf/d reallocation optionality before needing new growth
Infrastructure Support: Midstream expansions in Appalachia to meet 3 Bcf/d new demand by 2029
Analyst Q&A Takeaways:
Local Pricing Bull Case:
EQT is tying contracts to M2 and EGTS pricing, not Henry Hub — citing expected basis tightening by decade-end due to regional demand surge and inventory exhaustion among peers.
Infrastructure-Driven Demand:
New demand from MVP Boost, Southgate, Shippingport, and Homer City totals ~3 Bcf/d.
EQT sees this largely backfilled by existing volumes, emphasizing their control of infrastructure and local egress.
Midstream Advantage:
EQT's integrated upstream-midstream platform gives them a structural edge.
Ability to “close the last mile” between EQT gas and new power plant interconnects is central to project capture.
Haynesville Commentary:
EQT flagged inventory exhaustion and unjustified drilling activity in Haynesville as a bearish market force — warning this price-chasing behavior risks “value destruction.”
LNG Exposure:
EQT remains bullish long-term on LNG demand (~2030+), aiming to contract directly with end-users, not just liquefiers.
~5–10% of volumes targeted for LNG with contract structures similar to AI/data center deals.
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Expand (Q1 2025 EC)
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04/30/2025
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2025 Production Guidance: Total production: 7.2 Bcfe/d (raised from 7.1 Bcfe/d)
Drilling & Completion: Running up to 15 rigs in 2025 compared to 16 in 2024. 4 frac crews active in Q2 (average of 3-3.5 for full year)
Key Basin Activity: Capital activity is expected to be more constant, building and drawing storage while enhancing efficiencies.
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CNX (Q1 2025 EC)
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04/24/2025
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Total production: 1.65-1.70 Bcfe/d
2025 Guidance: Optionality to increase volumes or accelerate volumes in the second half of the year in response to market conditions. If prices remain high or move higher, activity will be ramped up. "We'll see where end of summer storage is targeting, and go off that as our cue."
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Local Demand
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The Appalachian basin is located in close proximity to Northeast US demand centers, with the Northeast being one of the largest gas-consuming regions in the country during the winter months. Demand in Appalachia specifically reached about 13.5 Bcf/d in February 2025, while the Northeast region as a whole saw consumption hit 29.8 Bcf/d.
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Coal-to-Gas Switching: The Northeast US still utilizes a significant amount of coal in its power sector. Among all the US balancing authorities, PJM has the second-largest operating coal fleet, after its neighbor MISO. When gas prices rise, more coal generation can be called up, helping to balance the market.
Coal Retirements: Out of PJM's nearly 40 GW of coal generation capacity, about 7.5 GW is scheduled to retire over the next three years. This should reduce coal-to-gas switching capability and support gas demand.
Renewables: According to the EIA, PJM plans to install about 16 GW of renewables over the next three years. While the actual generating capacity is likely to be about one-third of the nameplate capacity, the continued expansion of renewables threatens to erode natural gas's market share.
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Data Centers and Electrification: The rise of data centers and electrification of oilfield operations (e.g., electric drilling rigs) also adds to power demand. The Northern Virginia region is currently the largest market for data centers, and power demand will likely increase over the next several years. This could support regional power demand and, thus, natural gas prices.
LNG: The Cove Point LNG export plant in Maryland is the only LNG export facility in the Northeast. The relatively small 0.9 Bcf/d facility typically shuts down for maintenance for about a month every Fall, coinciding with a weakening of Northeast cash prices and a decline in production as pipeline egress capacity tightens due to the drop in demand.
Environmental Concerns: There is often opposition to pipeline projects and energy infrastructure in the region from Environmental groups. This opposition contributed to the multi-year delay in Mountain Valley Pipeline.
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In this area, there are multiple basis locations affected by similar market conditions. Many AEGIS customers hedge Eastern Gas South Basis, formerly known as Dominion South.
The reader will notice that Eastern Gas South and Tetco M2 have very similar forward curves. AEGIS notes that historically the Tetco pipeline has had many more instances of emergency outages that have caused cash-price discrepancies between M2 and other nearby prices.
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Recent Market-Relevant events
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EQT Advances Over 1 Bcf/d in MVP Expansions for Appalachian Natural Gas
(July 24, 2025)
EQT is advancing two major expansions of the Mountain Valley Pipeline (MVP), totaling 1.05 Bcf/d of new takeaway for Appalachian natural gas.
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MVP Boost: +500 MMcf/d by 2028 via 180,000 hp compression addition
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MVP Southgate: +550 MMcf/d by 2029, serving Carolinas utilities
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The expansions aim to relieve Appalachian basis pressure by opening access to higher-priced Southeast markets
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New regional gas demand (e.g., AI campuses, data centers) allows EQT to sell more gas at local premium prices without competing for Gulf Coast pipe space
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EQT Secures Major Gas Deals to Supply 4.4 GW AI Campus and 1 GW Data Center in Pennsylvania
(July 16, 2025)
EQT Corp. signed two major gas supply agreements, including one with Homer City Redevelopment (HCR) to fuel a 4.4 GW gas-fired AI computing campus in Homer City, PA, slated to begin operations in 2027.
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EQT will supply up to 665,000 MMBtu/d (~.6 Bcf/d) to HCR, potentially making it one of the 40 largest U.S. gas purchasers and one of the largest single-site gas supply agreements in North American history
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EQT also struck a separate agreement with Frontier Group of Companies to supply the planned 1+ GW Shipping port Power Station at the former Bruce Mansfield site in Beaver County, PA, which includes a co-located data center and up to 800 MMcf/d of demand
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Williams begins effort to revive NESE and Constitution Pipelines
(May 30, 2025)
Williams is pursuing the revival of two long-stalled Northeast gas pipelines—Northeast Supply Enhancement (NESE) and Constitution.
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The company has requested that FERC reinstate NESE’s lapsed certificate and is working through permitting issues in NY, NJ, and PA
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NESE is a 400 MMcf/d expansion of the Transco system aimed at supplying National Grid customers in NYC and Long Island
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Williams is also engaging with regulators on the 650 MMcf/d Constitution Pipeline, which was canceled in 2020 after failing to obtain state water quality permits
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However, permitting challenges remain significant, and there is no immediate price impact until approvals are secured
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For more regularly updated reports like this one:
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