In its Fall 2012 North American Natural Gas Market Outlook, an outlook that Navigant publishes twice a year, analysts reviewed prices, supply and demand through 2035. The outlook focuses on changing demand, including increases to expectations for liquefied natural gas (LNG) exports.

“The Fall 2012 Outlook is our most current projection for the North American natural gas market including monthly prices over the long term to 2035,” said Gordon Pickering, a director in the Energy Practice. “Our team has taken a particularly close look at natural gas demand, in a market that has until recently been a supply-driven market. With the recent transformation of natural gas supply in North America, ample supply has already driven impactful market responses, which in turn will help redefine a ‘new’ North American gas market in the future.”

Most of the projected growth over the medium term is forecast to follow increased coal-to-gas substitution in the power sector “as a result of persistently low but slowly increasing natural gas prices, as well as significant scheduled retirements of existing coal-fired generation plants expected across the United States over the next five to seven years.”

Navigant is forecasting that gas use in the power generation sector will jump 55% to 44.8 Bcf/d in 2035 from 28.9 Bcf/d this year. A 37% increase in total North American gas demand is projected by 2035 to 104.6 Bcf/d from 76.4 Bcf/d.

“Sustained development of onshore natural gas resources with shale gas production in North America [is] continuing to grow, increasing from 27.4 Bcf/d in 2012 to 75.5 Bcf/d in 2035, representing 33% and 63% of total dry production, respectively,” according to the forecast. “These are in relation to the U.S. market where shale currently represents 38% of U.S. production, but increases to 66% in 2035.”

A “modest revival” is expected in the industrial sector, including petrochemicals, which should stimulate gas demand to 34 Bcf/d by 2035 from 24.7 Bcf/d this year. Navigant also has a more optimistic view on future North American LNG exports, with a projected total of 6.8 Bcf/d by 2020.

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