HOUSTON: Top US exporter of liquefied natural gas Cheniere Energy Inc on Thursday said high prices and an “extremely volatile” global market are driving more long-term supply contracts.

Russia’s attack on the Ukraine sent European gas prices up 40% on Thursday, a signal that LNG will remain a critical part of Europe’s energy mix, said Chief Commercial Officer Anatol Feygin.

Even before the invasion, LNG demand had soared, sending prices late last year to record highs on supply shortages and a shift to gas from more polluting fuels. LNG suppliers rely on long-term contracts to finance new plants.

Strong demand could allow the company to make a final investment decision “in the near term” on a major expansion at its Corpus Christi, Texas, plant, said Chief Executive Jack Fusco. That expansion would add 10 million tonnes per year of fuel capacity.

More than 200 million tonnes of contracted LNG volumes will expire over the next decade, with about 100 million tonnes of LNG contracts needing to be replaced between 2026 and 2030, he said. Two-thirds of contracts signed by Cheniere last year were with Asian buyers, 45% of which were from China, Feygin said.

Cheniere on Thursday raised its earnings outlook by about 20% on stronger margins and expected volume gains from new capacity. Its shares rose 6.8% to $127.02 in mid-day trading on the optimistic outlook.

Cheniere forecast an adjusted profit for this year of as much as $7.5 billion, up from an earlier outlook for up to $6.3 billion. It expects an up to $1.2 billion increase in distributable cash flow, the company said.