According to a recent report, the natural gas industry in the US is showing optimism despite experiencing expansion difficulties.
Key findings from Black & Veatch’s ‘Strategic Directions in the North American Natural Gas Industry’ report show that the industry is embarking on a period of sustained growth driven by low-cost shale gas resources. However, in order to fully realise the benefits of the economy, industry leaders will have to deal with the problems of a rapidly evolving energy market in the US.
“The report’s findings show that stakeholders across the value chain must work together and compromise on key issues,” commented Peter Abt, Managing Director of Black & Veatch’s oil and gas strategy practice. “The general consensus is that more pipeline capacity is needed. How this capacity is financed – and who pays for it – is the area of disconnect. Without pipeline investment, the natural gas industry’s growth will slow and consumers could see dramatic price swings.”
The good news for the industry, however, is that growth is expected to continue. More than 95% of natural gas industry leaders said they were optimistic in their outlook towards future growth in the natural gas industry.
“The prevailing optimism across the industry is largely driven by expected growth in the power generation, LNG (liquefied natural gas) export and transportation markets,” said John Chevrette, President of Black & Veatch’s Management Consulting Division. “Black & Veatch’s projections have demand for natural gas from the power generation market nearly doubling by 2020.”
Other key findings include:
- Gas prices expected to rise.
Black & Veatch analysts believe gas prices will rise to between US$ 4.50 and US$ 5.99 per million Btu by 2020.
- Safety, economic growth and regulation were rated as top industry concerns.
- Commodity enhancement is a growing trend among natural gas producers.
There is growing interest among producers for onsite LNG and/or compressed natural gas production.
- US LNG exports have cost benefits over global competitors.
In addition to lower pricing, LNG export prospects from the US benefit from the existence of eight brownfield LNG terminal projects. These facilities were previously developed to import natural gas, however much of the existing infrastructure can be used for export terminal purposes, speeding up access to the market for US gas.
- Cyber security tougher task for small utilities.
Only 42% of respondents from small utilities (less than 100 000 customers) have cyber security programs in place or in the planning stages, compared with almost 90% of large utilities (over 1 million customers).
Adapted from press release by Katie Woodward
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/01112013/natural_gas_future_looks_bright_370/