The Energy practice at Navigant has released a report titled ‘North American Natural Gas Market Outlook, Fall 2013’, which provides updated information on natural gas prices, dry conventional gas and shale gas production as well as natural gas demand, storage activity and projections.
- In the short term natural gas prices in North America are expected to recover from 2012 lows, but stay at moderate levels.
- Average Henry Hub price is expected to return to over US$ 5/million Btu after 2020 and reach US$ 6.93/million Btu by 2035.
- North American consumer natural gas demand is expected to rise from 77.8 billion ft3/d in 2013 to 108.7 billion ft3/d in 2035.
- Domestic consumption of natural gas will grow at an average of 2.2% /y from 2013 through 2020.
- The renaissance of the US industrial sector, low natural gas prices and increased use of natural gas in oilsands production will contribute greatly to the increased demand for natural gas.
- Fuel demand for Natural Gas Vehicles (NGVs) will increase from 0.2 billion ft3/d in 2013 to 5 billion ft3/d in 2035.
- North American dry natural gas production is expected to grow by 44% from 87.3 billion ft3/d in 2013 to 124.5 billion ft3/d in 2035.
- Shale resources will largely dictate the future landscape of regional natural gas production.
- The percentage of unconventional gas that makes up North American dry natural gas production is projected to grown from 35% in 2013 to 58% in 2035.
- LNG exports are expected to grow in North America, reaching up to 7.8 billion ft3/d by 2022.
- The US is expected to become a net LNG exporter in 2017.
- The US is expected to become a net natural gas exported in 2019.
Comments on the outlook
Gordon Pickering, a director with Navigant’s Energy Practice and author of the outlook said, ‘five years after the first significant efforts of gas shale in the US, the North American market is still being driven by fundamental gas supply and production growth. Looking forward, the market is expected to be largely influenced by abundant, even surplus supply in the short and mid term, then evolve over the longer term into a market that is fully connected to the global natural gas market. The global connection will result from both the rapidly developing North American natural gas liquefaction sector and natural gas exports to anxiously waiting markets, particularly in Europe and in Asia.’
Edited from various sources by Claira Lloyd
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