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Released October 21, 2024 | SUGAR LAND
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Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--Accounting for market fluctuations has always been part of planning for the energy industry--and today's interwoven international markets are more connected than ever, especially regarding liquefied natural gas (LNG) trade. In an October 10 seminar, Industrial Info's' detailed current data combined with East Daley's insightful predictive methods to give the industry insight into the options for the next 18 months.
IIR's Maria Sanchez and East Daley's Jack Weixel addressed three areas: Supply, which was covered in installment one; demand, discussed here, and storage, to be addressed in the next article. For more information, see October 16, 2024, article - What's Happening with Natural Gas Volatility? Industrial Info, East Daley Explain.
Demand Uptick
Rising demand from AI and data centers is legendary, but Weixel sees that as more of a long-term issue than one affecting the next 18 months. For the summer 2025 power burn forecast, "We think that it will be around 35.9 Bcf/d (billion cubic feet per day), or 0.3 Bcf/d higher than the calculated 2024 average. The reason for that is continued load growth and continued reliance on gas-fired power generation by ISOs (independent system operators) and RTFs (regional transmission organizations)."
By 2030, however, data center newbuilds alone will need 20 gigawatts (GW) to 25 GW in combined-cycle natural gas generation plants. Combined-cycle plants recapture waste heat from a gas turbine to heat water that runs a steam turbine, generating up to 50% more power than a plant using a single turbine of either type.
The reason the demand ramp-up isn't sooner, said Weixel, is that there are so many ISO and RTF projects lined up, it will take a few years for them to be built out. Of those newbuilds, approximately 79 GW of gas-powered generation, including all cycle types will be required, which would add 6.5 Bcf/d of demand. But, Weixel noted, actual completions by 2030 will more likely require just 2.5 Bcf/d, which is what East Daley hedged its final number down to.
Pausing the LNG Pause--Or Did They?
After utilities, LNG for exports is another rising demand destination. Earlier this year, bowing to environmental concerns, the Biden administration had announced a pause on approval of new LNG export facilities pending deeper environmental review. But a consortium of oil producing companies and oil-tax-dependent states filed an injunction in a federal court in Louisiana, which overturned the pause.
But Weixel said there are more ways to delay approval than meet the eye. "What we've learned...is that the definition of 'expeditious review' is a little thorny. Certainly...some of the people in (Washington) D.C. have a stranger view of what expeditious review really means." So how quickly the currently pending 28 Bcf/d of capacity will be completed is uncertain.
What's Happening Now
Industrial Info's Sanchez noted that current LNG feed gas levels are just slightly below their 2023 numbers at this point of the year. Some of that is due to the fact that the Cove Point LNG facility located off the coast of Maryland had its annual 30-day maintenance protocol. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Plant Database can click here for the Cove Point plant profile.
Where Is Data Center Demand Coming Online?
For data centers, there has been much publicity about them relying on renewables instead of fossil fuels like natural gas--but Sanchez pointed out that renewables, even backed up with batteries, "are not going to be able to keep up with the demand."
While a new data center can arise anywhere there is available power, the Industrial Info heat map of newbuilds shows concentrations around San Antonio, Texas; in the northeast around Philadelphia, Pennsylvania, and Washington, D.C: and Arizona, as well as Atlanta, Georgia, and Chicago, Illinois. "This accounts for about a 9% increase in grid demand," Sanchez explained.
The IIR dashboard shows 24 GW of data centers are now operational, with 45 GW more in the planning stages, with yet more in engineering and construction phases.
Click on the image at right for the U.S. data center megawatt load by startup quarter.
Sanchez pointed out that, on a global view, data center growth may boost demand for U.S. LNG exports, while this data focuses on the U.S., data center demand is exploding worldwide, poised to create more demand for U.S. LNG exports.
The final installation will cover the third leg of the gas prediction stool--storage and pricing.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
IIR's Maria Sanchez and East Daley's Jack Weixel addressed three areas: Supply, which was covered in installment one; demand, discussed here, and storage, to be addressed in the next article. For more information, see October 16, 2024, article - What's Happening with Natural Gas Volatility? Industrial Info, East Daley Explain.
Demand Uptick
Rising demand from AI and data centers is legendary, but Weixel sees that as more of a long-term issue than one affecting the next 18 months. For the summer 2025 power burn forecast, "We think that it will be around 35.9 Bcf/d (billion cubic feet per day), or 0.3 Bcf/d higher than the calculated 2024 average. The reason for that is continued load growth and continued reliance on gas-fired power generation by ISOs (independent system operators) and RTFs (regional transmission organizations)."
By 2030, however, data center newbuilds alone will need 20 gigawatts (GW) to 25 GW in combined-cycle natural gas generation plants. Combined-cycle plants recapture waste heat from a gas turbine to heat water that runs a steam turbine, generating up to 50% more power than a plant using a single turbine of either type.
The reason the demand ramp-up isn't sooner, said Weixel, is that there are so many ISO and RTF projects lined up, it will take a few years for them to be built out. Of those newbuilds, approximately 79 GW of gas-powered generation, including all cycle types will be required, which would add 6.5 Bcf/d of demand. But, Weixel noted, actual completions by 2030 will more likely require just 2.5 Bcf/d, which is what East Daley hedged its final number down to.
Pausing the LNG Pause--Or Did They?
After utilities, LNG for exports is another rising demand destination. Earlier this year, bowing to environmental concerns, the Biden administration had announced a pause on approval of new LNG export facilities pending deeper environmental review. But a consortium of oil producing companies and oil-tax-dependent states filed an injunction in a federal court in Louisiana, which overturned the pause.
But Weixel said there are more ways to delay approval than meet the eye. "What we've learned...is that the definition of 'expeditious review' is a little thorny. Certainly...some of the people in (Washington) D.C. have a stranger view of what expeditious review really means." So how quickly the currently pending 28 Bcf/d of capacity will be completed is uncertain.
What's Happening Now
Industrial Info's Sanchez noted that current LNG feed gas levels are just slightly below their 2023 numbers at this point of the year. Some of that is due to the fact that the Cove Point LNG facility located off the coast of Maryland had its annual 30-day maintenance protocol. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Plant Database can click here for the Cove Point plant profile.
Where Is Data Center Demand Coming Online?
For data centers, there has been much publicity about them relying on renewables instead of fossil fuels like natural gas--but Sanchez pointed out that renewables, even backed up with batteries, "are not going to be able to keep up with the demand."
While a new data center can arise anywhere there is available power, the Industrial Info heat map of newbuilds shows concentrations around San Antonio, Texas; in the northeast around Philadelphia, Pennsylvania, and Washington, D.C: and Arizona, as well as Atlanta, Georgia, and Chicago, Illinois. "This accounts for about a 9% increase in grid demand," Sanchez explained.
The IIR dashboard shows 24 GW of data centers are now operational, with 45 GW more in the planning stages, with yet more in engineering and construction phases.
Sanchez pointed out that, on a global view, data center growth may boost demand for U.S. LNG exports, while this data focuses on the U.S., data center demand is exploding worldwide, poised to create more demand for U.S. LNG exports.
The final installation will cover the third leg of the gas prediction stool--storage and pricing.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
