U.S. Natural Gas Market - Jan 9
Posted: Tue Jan 09, 2018 11:45 am
Notes from the EnerCom Survey:
U.S. natural gas production will again astound in 2018 as continued drilling and new pipeline capacity connects supplies to demand centers.
Utilization may reach all-time highs as well, as end-use and exports grow. January 1 already set a new single-day record for U.S. natural gas consumption. In addition to the Cove Point terminal in Maryland, we are likely to see two or three more liquefied natural gas (LNG) export terminals come online in 2018. Feedgas for LNG export will help absorb growing supplies.
Exports to Mexico may grow slowly as 2018 begins, but the latter half of the year may bring online new large projects, such as the Sur de Texas pipeline, and boost demand.
New plants that use natural gas to generate electricity will be built this year in the U.S. with 20 gigawatts or more of capacity possibly coming online. New capacity of renewable electricity, mostly solar and wind, will likely be strong as well.
At the same time, more than 13 gigawatts of conventional steam coal capacity is set to retire in 2018, more than double the amount from last year.
EIA projects natural gas prices at Henry Hub to average $3.24/MMBtu in 2018. Overall, the U.S. demand elements are bullish. Production is bearish. Hard to say which might win out. But I’ll note that production continues to surprise everyone.
U.S. natural gas production will again astound in 2018 as continued drilling and new pipeline capacity connects supplies to demand centers.
Utilization may reach all-time highs as well, as end-use and exports grow. January 1 already set a new single-day record for U.S. natural gas consumption. In addition to the Cove Point terminal in Maryland, we are likely to see two or three more liquefied natural gas (LNG) export terminals come online in 2018. Feedgas for LNG export will help absorb growing supplies.
Exports to Mexico may grow slowly as 2018 begins, but the latter half of the year may bring online new large projects, such as the Sur de Texas pipeline, and boost demand.
New plants that use natural gas to generate electricity will be built this year in the U.S. with 20 gigawatts or more of capacity possibly coming online. New capacity of renewable electricity, mostly solar and wind, will likely be strong as well.
At the same time, more than 13 gigawatts of conventional steam coal capacity is set to retire in 2018, more than double the amount from last year.
EIA projects natural gas prices at Henry Hub to average $3.24/MMBtu in 2018. Overall, the U.S. demand elements are bullish. Production is bearish. Hard to say which might win out. But I’ll note that production continues to surprise everyone.