Citadel has made a substantial move into the US natural gas sector with a $1bn agreement to acquire assets from Paloma Natural Gas, reported Bloomberg.

This marks one of the hedge fund's largest investments in the physical natural gas market and expands its presence in one of its most profitable areas.

The deal, led by Citadel founder Ken Griffin, provides the hedge fund with access to acreage and producing assets in the US, although it will not directly operate them.

Citadel's expansion into the drilling and production side of the industry is relatively rare for a hedge fund and underscores the growing interest in natural gas, fuelled by increasing demand from US exports, data centres and AI applications.

Global commodities trading company Gunvor Group is actively seeking additional US gas production assets, and another commodity trading company, Mercuria Energy Group, has recently invested in Black Bayou Energy Hub, a gas storage facility in Louisiana.

A spokesperson for Citadel said: “Investing in the growth of independent gas producers helps to ensure America’s energy independence, and Citadel performs an important role in that effort.”

The specific details of Citadel's purchase from Paloma have not been disclosed.

Paloma Natural Gas's portfolio includes 57,000 net mineral acres in Louisiana's Haynesville shale basin, a region considered a prime location for gas assets due to its proximity to upcoming export terminals.

EnCap Investments, a backer of Paloma, has not commented on the transaction.

The acquisition comes as the US is poised to increase its liquefied natural gas export capacity by 60% in the coming years, a projection supported by data from BloombergNEF.