Gas industry entering a new chapter
April 2, 2015 | By
Barbara Vergetis Lundin
Driven by ongoing shale gas growth in the Northeast, production of natural gas in the United States continued its strong growth in 2014, increasing by 6.1 billion cubic feet per day (Bcfd), or 9.2 percent, according to Navigant Research. Navigant expects more growth in gas production, particularly from the Marcellus shale formation, with the only possible constraint the rate of infrastructure development in the region. In fact, Navigant predicts U.S. natural gas supply to increase from 72 Bcfd in 2015 to nearly 110 Bcfd by 2035, and U.S. natural gas demand to grow steadily through 2035, particularly for electricity generation, reaching around 90 Bcfd annually by 2035. "Supply side growth continues to drive most other aspects of the natural gas industry in North America," said Gordon Pickering, director, Navigant Research Energy Practice. "…this strong supply basis is giving rise to a new chapter of the gas industry, with the culmination of a half decade of new LNG project development and the beginning of a new, global market for natural gas." This new chapter is marked by the opening of new export capacity on the U.S. Gulf Coast, according to Navigant, with the opening of Sabine Pass signifying the point at which North America becomes connected to the global gas market for the first time in history -- with truly global consequences for gas markets in North America and around the world. Those consequences will become fully apparent as more LNG export projects come online, the Navigant concludes. Navigant also predicts annual average natural gas prices at Henry Hub to stabilize over the near to mid-term, and grow steadily over the long-term, but reaching only moderate levels compared to historical gas price levels seen earlier this century. Further, additional infrastructure in the Marcellus and Utica shale gas regions, coming online around 2017, is expected to relieve bottlenecks and allow stranded gas to move to market, enabling prices to recover to levels similar to the broader North American gas market. For more: © 2015 FierceMarkets, a division of Questex Media Group LLC. All rights reserved. http://www.fierceenergy.com/story/gas-industry-entering-new-chapter/2015-04-02 |