EIA Expects US NatGas Output to Exceed Consumption in 2019
1/15 1:12 PM
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. (c) 2019 DTN. All rights reserved.
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