HOUSTON (Reuters) - U.S. natural gas producers and investment firms are gearing up for more activity in Louisiana's Haynesville shale basin, positioning themselves for a boom in liquefied natural gas exports boosted by new approvals from President Donald Trump.

Gas prices are rising as LNG producers in the United States, already the world's largest LNG exporter, bring new projects online in Texas and Louisiana. U.S. gas demand is expected to hit record highs in 2025 and 2026.

Energy companies are planning and building big-ticket LNG projects that will require even more growth in domestic supply in the coming decade after Trump reversed a moratorium on new projects in the first days of his administration.

That is prompting energy producers to look again at gas plays that may help supply these future U.S. LNG plants.

Haynesville's location in east Texas and northwest Louisiana is ideal for exports from LNG facilities and projects clustered on the nearby Gulf Coast.

Gas from Haynesville is easier to convert to LNG because it has fewer impurities that hinder liquefaction, such as nitrogen and hydrogen sulfide, said Gordon Huddleston, president of Aethon Energy, one of the largest gas producers in the basin. Aethon is exploring an IPO or asset sales, given demand for its product.

"I think everyone is really going to jump back into the Haynesville," said George Whittington, managing partner at Proven Resources, who told Reuters last week the energy investment firm is raising a $25 million fund to acquire mineral and royalty rights in the basin.

Momentum Minerals also told Reuters on Monday the mineral rights and royalties company is raising a fourth fund with partner Apollo Global Management to buy more rights in Haynesville and in the Permian, the top U.S. oilfield.

Such moves by investment firms are often an early signal of future growth, and the rising expectations for Haynesville were shared by several energy companies in quarterly earnings calls, including the largest U.S. gas producer, Expand Energy ( EXE ), as well as smaller producer Comstock Resources ( CRK ) and oilfield service firm, KLX Energy Services Holdings ( KLXE ).

Murray Auchincloss, CEO of UK oil major BP, which holds more than half a million acres in the basin, proclaimed "the time has come for the Haynesville" at a conference in Houston earlier this month.

Japan's Tokyo Gas ( TKGSF ), an example of international interest, has been an active buyer of Haynesville assets in the last two years as Japan's biggest city gas provider seeks to mitigate disruption to its supplies caused by sanctions on Russia following Moscow's invasion of Ukraine. It plans to spend at least $1.9 billion on its U.S. shale business between 2026 and 2029.

'A LITTLE GUN SHY'            

Haynesville gas production is about half that of the prolific Permian Basin in Texas and New Mexico, but is expected to grow at a faster rate, according to government forecasts.

Operators say they will move more carefully than in the past to avoid a bust. They also face challenges, starting with the time and cost of drilling the deeper wells the Haynesville basin requires.

"Producers are nervous about getting in front of demand again, because they did it last year, and it was painful," Huddleston said, referring to a warm winter in the U.S. in 2023 that drove down gas prices.

"Everyone's a little gun shy."

The breakeven price for new production in Haynesville is roughly $3.75 per million British thermal units (mmBtu), said David Seduski, head of North American natural gas at Energy Aspects, although it varies within the basin.

In contrast, the breakeven in the Marcellus shale field, which covers Pennsylvania, West Virginia and Ohio, is around $2.15. 

Gas futures will need to stabilize around $5.00 through 2027 before large gas producers have an incentive to ramp up production, said Kevin MacCurdy, managing director at Pickering Energy Partners.

Analysts predict prices will be lower than $5.00 in the coming years, but LNG export demand could change the equation, given higher prices abroad. Gas was trading around $13 per mmBtu at both the Dutch Title Transfer Facility benchmark in Europe and the Japan Korea Marker benchmark in Asia.

James Elder, CEO of Momentum Minerals, said in the past few years his firm bought mineral and royalty rights in parts of the Haynesville that were not yet producing gas because prices were low. Now, the firm is hoping producers will drill prudently as prices rise.

"Our hopes are that operators have learned their lesson and won't get ahead of their skis," he said.

(Reporting by Georgina McCartney, Sheila Dang and Arathy Somasekhar in Houston and Scott DiSavino and David French in New York; editing by Peter Henderson and Marguerita Choy)