Energy experts say the full value of China’s October 29 agreement with President Trump to resume purchases of American oil and gas, possibly including a major LNG transaction involving Alaska, is still uncertain. However, they agree the move is a positive development for the U.S. energy industry.
The announcement has been well received by the Permian Basin Petroleum Association (PBPA), the Texas Independent Producers & Royalty Owners Association (TIPRO), and Amarillo economist Karr Ingham.
Permian Basin Producers Encouraged by Market Expansion
PBPA President Ben Shepperd said any agreement that expands U.S. liquefied natural gas (LNG) export markets demonstrates sustained global demand for American natural gas.
“Combined with existing demand in Europe and Asia, additional LNG export partners reinforce the strategic importance of the Permian Basin as a leading oil and gas producing region,” Shepperd said. “There are several infrastructure projects currently underway that will help resolve the pipeline takeaway constraints impacting production in the Basin. As capacity improves and Gulf Coast LNG export markets grow, the Permian is well positioned to supply both domestic and international demand, helping to ease regional oversupply.”
He added that long-term success requires aligning production growth with sufficient midstream and export infrastructure while closely monitoring changes in global demand and regulatory conditions.
TIPRO President Says China Deal Strengthens LNG Outlook
TIPRO President Ed Longanecker said the U.S.-China announcement is significant for the LNG industry, although it may not be transformational in isolation.
“China’s pledge to resume and expand LNG imports removes the 15 percent retaliatory tariff that kept U.S. gas out of the world’s largest LNG import market for most of 2025,” Longanecker said. “This reopens a vital demand center just as the European market becomes increasingly saturated. Even a return to pre-trade war volumes, along with moderate growth, could bring in several billion dollars in annual export revenue while helping diversify away from Europe’s price-sensitive spot market.”
Longanecker also noted the deal improves the viability of upcoming export projects such as CP2 in Louisiana, Golden Pass, and Port Arthur. It also enhances the outlook for Henry Hub gas prices from 2026 to 2028.
Texas Infrastructure Is Doing the Heavy Lifting
While the China deal is a welcome development, Longanecker emphasized that the most impactful changes are occurring within Texas itself.
“The Permian gas glut that pushed Waha Hub prices into negative territory in 2024 and 2025 is being addressed through the largest pipeline expansion in Texas since the shale boom began,” he said.
With the Matterhorn Express Pipeline now online at 2.5 billion cubic feet per day, and with expansions underway on the Permian Highway, Gulf Coast Express, Whistler, and other pipelines, about 12 billion cubic feet per day of new takeaway capacity is expected out of West Texas by 2027.
“That is more than enough to resolve the current bottleneck, stabilize Basin pricing, and fully supply both the seven operating LNG export terminals on the Gulf Coast and the four currently under construction,” he said.
Longanecker added that Texas, which already produces 45 percent of U.S. natural gas and hosts roughly 40 percent of current LNG export capacity, will see the greatest benefit.
“Associated gas volumes from the Permian can now move efficiently to waterborne export markets instead of being flared or shut in. This supports both producer economics and the state’s growing midstream and export complex,” he said. “The China deal provides momentum, but the real progress comes from pipeline infrastructure across Texas.”
Ingham Cautious on China’s Long-Term Role in U.S. LNG Market
Karr Ingham, president of the Texas Alliance of Energy Producers, said it remains to be seen how much impact the China deal will have on LNG exports in the near term.
“Every molecule of American LNG sold is a win for U.S. producers, especially in Texas, but China purchased no LNG from the U.S. in 2025 until a small volume of 546 million cubic feet in September,” Ingham said. “There are no reported volumes for October or November yet. While this could indicate the beginning of a recovery, it is not yet a meaningful market shift.”
Ingham noted that China accounted for less than 5 percent of U.S. LNG exports in 2024 and less than 3 percent of total U.S. natural gas exports including pipelines. He said they are unlikely to reach even those levels again in 2026.
He pointed to both U.S. tariffs and China’s retaliatory measures as the primary reasons for the decline in exports. At the same time, overall LNG demand in China has declined and some of that demand has been replaced by pipeline gas from Russia via Siberia.
“None of this suggests a material increase in LNG exports to China in the near term,” Ingham said. “We might recover some of the lost volume this year and in 2026, but there is little evidence to support a significant increase in demand from China alone.”
He added that the more impactful developments continue to be in pipeline construction aimed at getting gas out of the Permian and to Gulf Coast markets.
“New projects continue to improve the ability to move Permian gas to market, although the industry is still playing catch-up,” he said. “This has kept prices for Permian gas well below national benchmarks.”
As of today, the Henry Hub price is $4.59 per MMBtu, while the Waha Hub price sits at just 13 cents.
“I think we all look forward to the day when natural gas produced in the Permian is properly valued in the marketplace,” Ingham said. “It’s a world-class resource. Even though it is largely tied to oil production, it holds far more value for Texas, the U.S., and global markets than current prices reflect.”
