South Korea’s POSCO International has agreed to purchase Chord Energy’s (CHRD) Marcellus gas assets for $550MM, the latest entry by an Asian consumer into the US gas patch. The deal highlights a theme East Daley sees emerging: Buying US gas is not the same as moving it to an LNG terminal.
The deal with Chord brings ~121 MMcf/d from ~32,000 net acres in the Marcellus dry gas window, operated mainly by Expand Energy (EXE). CHRD acquired the acreage as part of its $11B merger with Enerplus in 2024.
In an investor presentation, POSCO said the acquisition will spearhead its entry into gas marketing and LNG trading in the US. The company plans to send some of the gas to Gulf Coast LNG plants starting in 2029.
POSCO International, the energy and trading arm of Korea’s POSCO steel group, runs an LNG import terminal and power plants in South Korea and produces gas in Australia and Myanmar. The company already buys LNG from Cheniere Energy (LNG), but that contract won’t use this gas because Cheniere sources its own supply.
The CHRD production instead will anchor POSCO’s new marketing services to Gulf Coast LNG plants. However, that plan needs two things POSCO hasn’t announced: a contract to liquefy the gas at a Gulf terminal, and pipeline capacity to get it there.
Pipeline Contracts Stop in Tennessee
East Daley’s review of federal filings finds Chord (via Enerplus) has firm transport for ~47 MMcf/d of pipeline capacity, about 40% of current production. The contracts are displayed in the ‘Gas Pipeline Contracts’ dashboard in Energy Data Studio (see figure below). Most of the capacity (~40 MMcf/d) is available on Kinder Morgan’s (KMI) Tennessee Gas Pipeline (TGP), with a smaller contract (~7 MMcf/d) on Enbridge’s (ENB) Texas Eastern Transmission (TETCO).
The TETCO contract delivers into Mid-Atlantic markets and so won’t support POSCO’s LNG trading ambitions. Meanwhile, the southbound contracts on TGP end at Station 87 in northern Tennessee, and nearly half of the contracts expire in July 2027 (shown in the table below).
POSCO could reach the Gulf Coast by selling through operator Expand, but that arrangement won’t help much. Only ~7% of EXE’s Appalachian gas has firm capacity to Gulf LNG hubs, and none of it starts from northeastern Pennsylvania.
Gulf Capacity Expires When POSCO Needs It
East Daley’s review of pipeline contracts reaching Gulf LNG hubs found one northeastern Pennsylvania holder: Repsol, with ~450 MMcf/d on TGP. Those contracts expire between June 2027 and June 2030, subject to any renewal rights Repsol holds.
Without that capacity, POSCO will mostly sell its gas for Appalachian prices. In September, the local Leidy hub traded $1.48/MMBtu below the Henry Hub benchmark. Financial hedges can lock in part of that gap, but they don’t move a molecule to the Gulf.
Bottom Line: Owning US production and holding an LNG contract doesn’t move a molecule to the water. POSCO now has both, but lacks a pipeline path from its Marcellus wells to the Gulf Coast. – Jaxson Fryer Tickers: CHRD, ENB, EXE, KMI, LNG.
One Market, One Model: Gain a Holistic View of North America Supply & Demand
East Daley Analytics is pleased to announce the Canada Supply & Demand report. The Canada S&D completes our North American model, providing a fully integrated supply and demand forecast for crude oil and natural gas. East Daley follows molecules from Canadian production through US infrastructure to end-markets. Clients now have a continental view to anticipate trends, from how Canadian gas is reshaping Midwest markets, to how crude imports flow to Gulf Coast refiners. The Canada S&D report and dataset is available exclusively in Energy Data Studio. Reach out to learn more about East Daley’s North American energy model.
The Daley Note
Subscribe to The Daley Note for energy insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.