A new U.S. natural gas giant is looking overseas

• They have adjacent holdings in Louisiana and Pennsylvania, while the deal also brings in Southwestern's Ohio and West Virginia acreage.

Why it matters: It would create the nation's largest natgas producer, and it's the latest domino to fall in the U.S. oil and gas sector's ongoing consolidation.

• The companies account for 7% of U.S. production, the WSJ reports.

The intrigue: One driver is making the company a very competitive player in supplying the surge in U.S. liquefied natural gas exports from the Gulf Coast.

• Major cargoes first set sail in 2016, and last year the U.S. became the world's largest supplier.

The big picture: Up to 20% of the combined Chesapeake-Southwest production will feed LNG markets, they said, with the investor presentation calling the new entity "LNG ready."

• That reflects a previous target Chesapeake floated once before on its own.

What they're saying: "The combined company cements itself as a supplier of choice to U.S. Gulf Coast LNG seeking international pricing," Wood Mackenzie analyst Alex Beeker said in a note.

• LNG will increase its share of total U.S. gas demand from 12% now to 20% in 2030 "and account for the majority of future demand growth," Enverus Intelligence Research's Andrew Dittmar said in a note.

Zoom out: Even as global climate policies aim to speed up the transition from fossil fuels, Chesapeake expressed confidence in a robust and lasting market.

• "The world is short energy, and demand for our products is growing, both in the U.S. and overseas," Chesapeake CEO Nick Dell'Osso said in a statement.
• The companies said the deal positions them well, with an estimated $400 million in annual synergies, which helps lower their production breakeven point.

The bottom line: It's the "biggest gas-focused U.S. upstream deal in more than 10 years and reflects emerging confidence around the long-term outlook for the commodity," Dittmar writes.