EIA Expects US NatGas Output to Exceed Consumption in 2019

    

   ORANGE BEACH, Ala. (DTN) --- The Energy Information Administration today 
said its latest forecast show U.S. natural gas inventories at 1.405 Tcf at the 
end of March, which would be 15% lower than the five-year average for that time 
of year.

   In its latest Short-term Energy Outlook released this afternoon, EIA said it 
based the forecast on an assumption of relatively normal temperatures in the 
first quarter and growing natural gas production. 

   EIA expects inventory injections from the end of March through October to 
exceed the five-year average rate as natural gas production outpaces 
consumption. Inventories are projected at 3.758 Tcf at the end of October, 
which would be slightly above the previous five-year average for the end of 
October and 16% more than at the same time in 2018.

   EIA said U.S. dry natural gas production averaged a record high 83.3 Bcf/d 
in 2018. The agency forecasts dry natural gas production would average 90.2 
Bcf/d in 2019 and 92.2 Bcf/d in 2020, with increases in the Appalachia and 
Permian regions driving the growth.

   Total U.S. natural gas consumption averaged an estimated 81.6 billion Bcf/d 
in 2018. EIA expects domestic natural gas consumption will increase by 1.1 
Bcf/d or 1.3% in 2019 and grow an additional 0.9 Bcf/d or 1.1% in 2020.

   The largest natural gas consuming sector in the United States is the 
electric power sector, EIA said. 

   The share of U.S. total utility-scale electricity generation from natural 
gas-fired power plants is projected to climb from 35% in 2018 to 37% in 2020. 
Coal's forecast share of electricity generation is projected to fall from 28% 
in 2018 to 24% in 2020. 

   EIA estimates that electric generation consumed an average of 29.0 Bcf/d in 
2018, up 14.4% from 2017 because of warm summer weather in 2018 and the 
addition of natural gas-fired electric generation capacity. EIA forecasts power 
sector consumption of natural gas to remain largely unchanged in 2019 and then 
rise by 3.3% in 2020 because of continuing increases in natural gas-fired 
electric generation capacity.

   In 2019, the agency expects residential and commercial natural gas 
consumption will average 13.4 Bcf/d and 9.3 Bcf/d, respectively, which are 
similar to consumption levels in 2018.

   EIA forecasts U.S. industrial sector consumption of natural gas to rise by 
2.0% in 2019 and by 0.9% in 2020. Most of the increase in the forecast is 
attributable to new chemical projects.

   According to S&P Platts, three methanol plants with combined capacity of 
almost 3.3 million metric tons per year are currently under construction with 
in-service dates in 2019 and in 2020. The three plants would increase U.S. 
methanol capacity by 45%, EIA said. 

   U.S. exports of natural gas, including exports to Mexico and Canada via 
pipeline and as LNG, averaged 10.0 Bcf/d in 2018, EIA said. The agency 
forecasts that gross U.S exports will rise by 31.5% to 13.2 Bcf/d in 2019 and 
then by 15.1% to 15.2 Bcf/d in 2020.

   EIA expects U.S. LNG exports to increase from an estimated 3.0 Bcf/d in 2018 
to 5.1 Bcf/d in 2019 and to 6.8 Bcf/d in 2020, as three new liquefaction 
projects come online. EIA forecasts that U.S. LNG export capacity will almost 
double by the end of 2019 to 8.9 Bcf/d with the commissioning of new trains at 
Cameron LNG, Freeport LNG, and Elba Island LNG. 

   EIA expects that by mid-2020, U.S. LNG export capacity will reach 9.6 Bcf/d 
when the third train at Freeport LNG comes online and to climb to 10.2 Bcf/d 
once the third train at Corpus Christi LNG becomes operational.

   EIA said U.S. natural gas exports to Mexico via pipeline have also increased 
as more infrastructure has been built to transport natural gas both to and 
within Mexico. U.S. pipeline exports to Mexico in the first 10 months of 2018 
averaged 4.6 Bcf/d, up by 10% from the same period in 2017. 

   U.S. net natural gas pipeline imports from Canada decreased from 2017 to 
2018, EIA said. The agency projects net imports will continue to decline as 
Appalachian production growth displaces some Canadian natural gas imports in 
the U.S. Midwest markets.

   EIA forecasts Hydrocarbon Gas Liquids production at natural gas processing 
plants will increase from an estimated 4.4 million bpd in 2018 to 5.0 million 
bpd in 2019 and to 5.3 million bpd in 2020. HGLs produced at natural gas 
plants---ethane, propane, butanes, and natural gasoline---are expected to 
increase along with growth in natural gas production and natural gas processing 
plant capacity. EIA expects ethane to account for nearly half of the 900,000 
bpd increase in HGL production between 2018 and 2020. Higher rates of ethane 
recovery at natural gas processing plants is expected to help meet growing 
demand from petrochemicals producers in the United States and abroad.

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