Natural gas is surging to record highs in the United States and elsewhere as the nation looks to cut its reliance on imported energy sources, including coal.
The industry has seen record production in recent months, and it’s the leading contributor to a record $1.5 trillion in U.S. electricity production.
But it’s also been hit hard by natural gas prices, as prices have fallen by more than half from last year, according to research firm Statista.
Now that prices are dropping, Avista is looking to make natural gas more attractive to buyers by expanding its portfolio.
Avista will add more than $2 billion in new natural gas purchases this year, as part of a deal that was announced Wednesday with the New York Stock Exchange.
The company’s $2.7 billion acquisition of a $3.5 billion stake in Natural Gas Energy Services, which includes the $1 billion Avista acquired in May, will give Avista about 1.2 million megawatts of natural gas capacity in the next five years.
“We are confident that the natural gas market is about to experience unprecedented growth,” Avista CEO John Cote said in a statement.
Avista’s natural gas portfolio will include a $2-billion buyout of the Chicago-based natural gas trading firm Stifel, the New Orleans-based energy trading company Mettrum, and a $300 million purchase of the Los Angeles-based gas trader Energy Partners.
It’s a significant expansion that Avista has had on its hands, given that its shares have fallen 17% in the last 12 months.
But Cote and Avista chief financial officer Robert Loughran said the company has the potential to significantly increase its share of the market, thanks to the natural-gas renaissance.
This is a significant acquisition for Avista, which has been investing in natural gas since the late 1990s.
But the company is now looking to expand its portfolio, Loughrant said.
One of Avista’s first moves was to buy out the New Jersey-based Stifell Energy.
Stifelle, a trading firm, recently reported a loss of more than 3% and was acquired by Stifels parent company, Marathon Oil, in 2012.
Other deals announced Wednesday included the $500 million purchase by Avista of a 3.5% stake in the Los Angles-based GasTrac unit of the New Brunswick-based Energy Partners, which also owns Mettrums Natural Gas Trading and Stiflestech Energy Services.
The $3 billion Avistas acquisition of New Jersey’s Stifele Energy comes after Avista bought $1-billion stakes in Stifeltogics Natural Gas Services, Stiflegas Energy Services and StIFELabs Natural Gas & Petrochemical Services.