Because North America’s appetite for natural gas shows no signs of letting up anytime soon, policy makers need to take swift steps to deal with pipeline capacity constraints, liquefied natural gas (LNG) siting problems, production bottlenecks and gas storage concerns, says a new trilateral report by senior energy officials from the United States, Canada and Mexico.
“The ability of North America to sustain a competitive, efficient, reasonably priced and growing gas market seems to hinge on the issue of natural gas supply. There is considerable uncertainty around the timing and availability of various indigenous North American gas supplies and LNG imports,” noted the report that was released by the North American Energy Working Group (NAEWG) Friday.
“In addition, there are problems with assuring that infrastructure will be in place when demand requires more supply,” said the 119-page document, “North American Natural Gas Vision.”
The answer, according to the report, is for the governments of the United States, Canada and Mexico to work jointly with the gas industry to come up with ways to ensure adequate supplies for the continent, supported by a comprehensive pipeline, LNG and storage infrastructure.
Natural gas demand is expected to rise to 93.8 Bcf/d (34 Tcf) in 2012 from the current 73 Bcf/d (almost 27 Tcf), of which the United States accounts for 82%, the report said. Meanwhile, increases in conventional North American gas supplies appear unlikely during this period, it noted. “Production from conventional Canadian and U.S. gas basins in recent years has been flat to declining, despite historically high levels of natural gas drilling. Mexican gas production, while potentially significant, has faced some challenges because of a lack of financing and impediments of the legal framework to [using] private investment for resource development.”
LNG imports are expected to pick up the slack of North American production, increasing to almost 12.5 Bcf/d by 2025 from the current 1.1 Bcf. The Energy Information Administration has projected that LNG imports could hit 13.1 Bcf by 2025.
North America is “essentially self-sufficient” in natural gas at this stage, with only one percent of supply coming from overseas, the report said. North America currently produces and consumes approximately 27 Tcf of natural gas each year, up from about 22.7 Tcf in 1990. The United States is the largest gas producer in North America, accounting for 19 Tcf in 2002. But the self-sufficiency is not expected to last, which will require the U.S. to depend more and more on LNG imports, it noted.
“While LNG supplies to the U.S. represent a minor component of overall gas supplies, there is increasing diversity in LNG supply options and significant movement toward a global LNG commodity market,” the report said.
The report projects wellhead prices will range from (US)$3.62/Mcf to $4.10/Mcf in 2012.
Â©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2022 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |