Bentek: U.S. Natural Gas in the Midst of a Sea Change That Will Alter Flows, Prices
Platts/Bentek Report: Utica Shale Play Triggering Regional Role Reversal
HOUSTON, Oct. 8, 2013 /PRNewswire/ -- Massive shale-driven production growth in the U.S. Northeast and soaring demand from the Southeast will turn the nation's traditional south-to-north and west-to-east pipeline natural gas flows and price spreads upside down, according to Bentek Energy®, the natural gas and oil analytics unit of Platts, a leading global energy and commodities information provider.
"Based on our latest modeling, the U.S. is embarking on a true sea change," said Rocco Canonica, Bentek Energy director of energy analysis and lead author of the just-released 10-year outlook report Son of a Beast -- Utica Triggers Regional Role Reversal. "The Northeast is poised to switch from the nation's largest demand region to a net supply region, and the U.S. Southeast is racing to become a much larger net demand region after being a major supplier to the U.S. gas market."
The 114-page report released at Houston Platts Commodity Week, an annual energy and biofuels outlook event, says that more than one-third of the U.S. natural gas production increase from 2013 to 2023 -- or 9.1 billion cubic feet per day (Bcf/d) -- is expected to come from the Utica and Marcellus shale formations in the northeastern U.S., while nearly half of U.S. demand growth, or 9.4 Bcf/d, is expected to occur in the Southeast over the same period.
"This will contribute to making the Southeast a premium market relative to most other regions, pulling increasing amounts of gas from the Northeast, Texas and the Midcontinent," said Tony Sweet, Bentek Energy senior energy analyst and one of many speakers at Platts Commodity Week.
Bentek forecasts a 9% rise in natural gas prices by late decade at Henry Hub, a key North American hub and pricing reference.
Additional takeaways from the report include among others:
- Natural gas flows to the Northeast from other regions to plummet; net Northeast outflows to total 2.8 Bcf/d by 2023
- The liquids-rich shale plays of Texas and the Midcontinent to contribute about 44% of the expected U.S. natural gas supply growth over the next 10 years
- Total U.S. natural gas demand to rise 27% over the next decade, while U.S. supply to climb nearly 38%
- Substantial reconfiguration and repurposing of the U.S. natural gas pipeline grid
The report focuses on supply and demand fundamentals and highlights regional market changes afoot for more than a dozen natural gas production basins. It also includes an update on more than a half dozen expected liquefied natural gas (LNG) projects and a summary of anticipated flow changes in the Southeast/U.S. Gulf Coast, Texas, Midcontinent, Midwest, Rockies, Southwest, and Pacific Northwest.
Looking beyond the U.S., the report contains baseline natural gas forecasts for Canada and Mexico.
The second in what is expected to be a series of shale natural gas outlooks, today's report follows a prior analysis on the Marcellus, dubbed in 2010 by Bentek as Beast in the East.
Colorado-based Bentek Energy was acquired by Platts in 2011 and provides analytical tools and forecasts for natural gas, crude oil, natural gas liquids (NGLs) and power markets. For more information on natural gas analytics and Bentek Energy visit www.bentekenergy.com.
For more information on Platts and Houston Commodity Week, visit www.platts.com.
About Platts: Founded in 1909, Platts is a leading global provider of energy, petrochemicals, metals and agriculture information and a premier source of benchmark prices for the physical and futures markets. Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency. Customers in more than 150 countries benefit from Platts' coverage of the biofuels, carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, shipping and sugar markets. A division of McGraw Hill Financial (NYSE: MHFI), Platts is headquartered in New York with approximately 900 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.
About McGraw Hill Financial: McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power & Associates, McGraw Hill Construction and Aviation Week. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com.
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