Released August 22, 2019 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--U.S. natural gas production growth is expected to continue outstripping demand growth, which will limit price increases at Henry Hub, Bernadette Johnson, vice president of market intelligence for Drillinginfo (Littleton, Colorado) told a recent oil and gas conference in Denver.
Speaking August 13 at The Oil & Gas Conference, sponsored by EnerCom Incorporated (Denver, Colorado), Johnson forecast that production growth in the 2020-2024 period would slow from its growth in the 2015-2019 period, when producers added a total of 14.8 billion cubic feet per day (Bcf/d) of new production. She projected that natural gas production would rise about 6.4 Bcf/d over the next five years.
Production growth in the Marcellus and Utica shales is expected to slow from its torrid growth during the 2015-2019 period, when it increased by about 11.6 Bcf/d. She said she expected production growth from those formations to slow to about 2.2 Bcf/d over the next five years.
Production growth from the Permian Basin is expected to match production growth from the Marcellus and Utica shales over the next five years, she told the EnerCom conference attendees. The event, EnerCom's 24th annual conference, was attended by about 2,000 oil and gas company officials, analysts, bankers, investors and suppliers to the industry.
Click on the image at right to see Drillinginfo's forecast of U.S. natural gas production.
Industrial Info is tracking a total of 1,006 gas-related Production, Pipeline and Terminals projects in the U.S. valued at $237 billion that are scheduled to begin construction between January 2019 and December 2023. Liquefied natural gas (LNG) export terminals account for more than $100 billion in planned project activity.
Johnson, the Drillinginfo VP, told the EnerCom conference attendees that gas demand would exceed 100 Bcf/d in the next few years, driven by exports of LNG and pipeline exports to Mexico. LNG exports, expected to be about 4.7 Bcf/d this year, are forecast to more than double over the 2020-2024 period, to about 10 Bcf/d, she said. Gas as a fuel for industrial processes, such as petrochemical manufacturing, is expected to rise about 600 million cubic feet per day, to approximately 8.6 Bcf/d, by 2024. She forecast demand rising modestly from other sectors, including the Power Industry.
Click on the image at right to see Drillinginfo's forecast of natural gas demand growth over the 2019-2024 period.
Noting that LNG exports have been growing "at an unprecedented rate," Johnson predicted more of the same for the next few years, as export terminals under construction, including Elba Island, Cameron, Freeport and Calcisieu Pass, begin operating. By the middle of the next decade, these projects and others that have not yet begun construction, could push U.S. LNG export capacity to about 43 Bcf/d, she estimated. How much gas will actually be liquefied and exported would depend on global market conditions, including the price of gas domestically.
Click on the image at right to see current and projected LNG export capacity.
Because U.S. gas production gains are expected to exceed demand growth, the Drillinginfo VP forecast only a modest rise in gas prices over the next five years. Her firm's projected prices varied somewhat from the futures market, but the general trajectory was the same.
Click on the image at right to see natural gas price projections for 2019-2024.
One potential fly in the ointment Johnson identified was continued infrastructure constraints in the Permian Basin, despite all the gas pipelines under construction or planned for that region. Production growth is expected to exceed outbound takeaway capacity for at least another year, she told conference attendees.
Click on the image at right to see Drillinginfo's projection of gas production and pipeline takeaway capacity in the Permian Basin.
"It's still a challenge getting shippers to make long-term commitments because there's not enough takeaway capacity in the Permian," she said. "Unless your name is Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas), you're not getting projects done."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Speaking August 13 at The Oil & Gas Conference, sponsored by EnerCom Incorporated (Denver, Colorado), Johnson forecast that production growth in the 2020-2024 period would slow from its growth in the 2015-2019 period, when producers added a total of 14.8 billion cubic feet per day (Bcf/d) of new production. She projected that natural gas production would rise about 6.4 Bcf/d over the next five years.
Production growth in the Marcellus and Utica shales is expected to slow from its torrid growth during the 2015-2019 period, when it increased by about 11.6 Bcf/d. She said she expected production growth from those formations to slow to about 2.2 Bcf/d over the next five years.
Production growth from the Permian Basin is expected to match production growth from the Marcellus and Utica shales over the next five years, she told the EnerCom conference attendees. The event, EnerCom's 24th annual conference, was attended by about 2,000 oil and gas company officials, analysts, bankers, investors and suppliers to the industry.
Click on the image at right to see Drillinginfo's forecast of U.S. natural gas production.Industrial Info is tracking a total of 1,006 gas-related Production, Pipeline and Terminals projects in the U.S. valued at $237 billion that are scheduled to begin construction between January 2019 and December 2023. Liquefied natural gas (LNG) export terminals account for more than $100 billion in planned project activity.
Johnson, the Drillinginfo VP, told the EnerCom conference attendees that gas demand would exceed 100 Bcf/d in the next few years, driven by exports of LNG and pipeline exports to Mexico. LNG exports, expected to be about 4.7 Bcf/d this year, are forecast to more than double over the 2020-2024 period, to about 10 Bcf/d, she said. Gas as a fuel for industrial processes, such as petrochemical manufacturing, is expected to rise about 600 million cubic feet per day, to approximately 8.6 Bcf/d, by 2024. She forecast demand rising modestly from other sectors, including the Power Industry.
Click on the image at right to see Drillinginfo's forecast of natural gas demand growth over the 2019-2024 period.Noting that LNG exports have been growing "at an unprecedented rate," Johnson predicted more of the same for the next few years, as export terminals under construction, including Elba Island, Cameron, Freeport and Calcisieu Pass, begin operating. By the middle of the next decade, these projects and others that have not yet begun construction, could push U.S. LNG export capacity to about 43 Bcf/d, she estimated. How much gas will actually be liquefied and exported would depend on global market conditions, including the price of gas domestically.
Click on the image at right to see current and projected LNG export capacity.Because U.S. gas production gains are expected to exceed demand growth, the Drillinginfo VP forecast only a modest rise in gas prices over the next five years. Her firm's projected prices varied somewhat from the futures market, but the general trajectory was the same.
Click on the image at right to see natural gas price projections for 2019-2024.One potential fly in the ointment Johnson identified was continued infrastructure constraints in the Permian Basin, despite all the gas pipelines under construction or planned for that region. Production growth is expected to exceed outbound takeaway capacity for at least another year, she told conference attendees.
Click on the image at right to see Drillinginfo's projection of gas production and pipeline takeaway capacity in the Permian Basin."It's still a challenge getting shippers to make long-term commitments because there's not enough takeaway capacity in the Permian," she said. "Unless your name is Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas), you're not getting projects done."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
