EIA sees US becoming net natural gas exporter in H2 2017
http://www.platts.com/latest-news/natural-gas/washington/eia-sees-us-becoming-net-natural-gas-exporter-2195815712 Jul 2016
With natural gas pipeline exports to Mexico on the rise and the ramp up of US LNG exports from Louisiana, the US Energy Information Administration on Tuesday projected the US will become a net exporter of natural gas in the second half of 2017.
EIA's July Short-Term Energy Outlook predicted gross pipeline exports will rise by 0.7 Bcf/d in 2016, then taper off by 0.2 Bcf/d in 2016 to an average of 5.3 Bcf/d. Driving the increase are the growing appetite from Mexico's power sector and flat gas production there.
At the same time, following the February kickoff cargo shipments from Cheniere's Sabine Pass LNG liquefaction plant in Louisiana, the agency as well expects a rise in gross LNG exports of 0.5 Bcf/d in 2016, and then 1.3 Bcf/d in 2017 as Sabine Pass ramps up capacity, the EIA outlook said.
"For the first time since 1957, the United States is on track to export more natural gas than it imports; this will occur during the second half of next year as more liquefied natural gas export capacity comes online," said EIA Administrator Adam Sieminski.
Net imports of natural gas by contrast are expected to decline from 2.6 Bcf/d in 2015 to 0.2 Bcf/d in 2017, EIA said.
Despite the export increase, Sieminski stressed that "there are still abundant supplies to meet domestic demand as natural gas inventories are expected to be at a record high for the start of the upcoming winter heating season." The outlook put inventories at 4,022 Bcf at the end of October 2016, a record for that time of year.
EIA lowered its natural gas consumption estimate in fourth-quarter 2016 by 0.33 Bcf/d to 79.34 Bcf/d. The July outlook said that US gas demand for full-year 2016 is expected to average 76.5 Bcf/d, while full-year 2017 demand is estimated at 77.7 Bcf/d, compared with 75.3 Bcf/d in 2015.
The projected rise in total gas consumption for 2016 is driven by the power sector's appetite for gas, EIA said, noting that power-sector gas demand is expected to rise 4.9% in 2016.
"Sustained low natural gas prices, resulting from record high natural gas production and growing gas inventories, have led to increased use of natural gas for electricity generation," said Sieminski.
Gas-fired generation for the first first half of 2016 was 6.8% higher than the same period a year earlier, while coal-fired generation dropped 21.1% over that timeframe. For the second half of the year, EIA sees gas-fired generation rising 2.5% year over year, even as coal generation rises by 2.9%. Power sector gas use is forecast to dip 1.4% in 2017 as gas prices rise, bolstering coal use for power generation, EIA added.
The agency raised its forecast for third-quarter Henry Hub natural gas spot prices to $2.71/MMBTU, 42 cents above its June estimate.
Prices averaged $2.59/MMBtu in June, up 67 cents/MMBtu from the average price in May. Those prices are expected to gradually rise "but remain lower than they were last summer," the agency said....
