EIA: Natural Gas Consumption
Natural gas consumption will continue to rise through 2017, providing more opportunities for Eagle Ford midstream operations.
Related: Eagle Ford Gas Heads to Mexico in $3.6 Billion Pipeline Deal
In their latest report, the U.S. Energy Information Administration (EIA) projects that the United States will become a net exporter of natural gas by late 2017. Analysts expect production to rise through 2016 and 2017 in response to forecast price increases and increases in liquefied natural gas (LNG) exports. Other EIA forecasts include:
- U.S. total natural gas consumption averages 76.5 Bcf/d in 2016 and 77.7 Bcf/d in 2017, compared with 75.3 Bcf/d in 2015.
- Electric power sector use of natural gas increases by 4.9% in 2016 and will decline by 1.4% in 2017
- Industrial sector consumption of natural gas increases by 2.7% in 2016 and by 1.5% in 2017
Exports will play a big part in the surge of consumption, The report predicts LNG exports will rise to an average of 0.5 Bcf/d in 2016 and 1.3 Bcf/d in 2017.
“Natural gas pipeline exports to Mexico have risen this year, and EIA expects that growth to continue because of growing demand from Mexico’s electric power sector and because of flat natural gas production in Mexico. Gross pipeline exports are expected to increase by 0.7 Bcf/d in 2016 before falling by 0.2 Bcf/d in 2017 to an average of 5.3 Bcf/d.”
Eagle Ford midstream companies are looking to prosper as natural gas exports overtake imports over the next 16 months. TransCanada and Spectra Energy are two producers who will receive $3.6 billion in contracts from Mexico’s state-owned Federal Electricity Commission to build 665 miles of pipelines to carry natural gas.
Other Eagle Ford companies uniquely positioned to take advantage of these markets in the coming months include:
- Howard Energy Partners: With acreage in Webb County, Howard plans to build a 200-mile pipeline to deliver 600 million cubic feet of natural gas per day to Mexico
- Lewis Energy: A top producer with positions inLa Salle, Webb and Dimmit Counties.
- Energy Transfer Partners: ETP already has natural gas export capabilities in Webb County and the Rio Grande Valley.
- Sanchez Energy: With tens of thousands of acres in the natural gas-rich lands of La Salle, Dimmit and Webb Counties, Sanchez entered a joint venture worth$115 million to bridge connections to Mexico.
- Flint Hills Resources: Has petitioned the federal government to ship LNG oversees.