Bentek Report: Demand Could Overtake Production as Driver of Shale Gas Revolution

NEW YORK, Aug. 26, 2014 /PRNewswire/ --

At this link view a map of planned U.S. fertilizer, gas-to-liquids and methanol facilities through 2021, courtesy of Bentek Energy.

Additional natural gas demand from re-emerging and non-traditional sources could exceed 5 billion cubic feet per day (Bcf/d) by 2019 as numerous proposed projects come online in the U.S and Canada, according to a just-released report from Bentek Energy®, an analytics and forecasting unit of Platts, a leading global provider of energy, petrochemicals, metals and agriculture information.

The 50-page, by subscription, report "Debunking the Alternative Gas Demand Myth" looks at the prospective demand stemming from new and old sectors – those that had downsized or closed in the early 2000s – and concluded that new demand, rather than new production, could become the driving force of the U.S. shale revolution during the next five years.   

Evaluating the capacity of the power-generation, industrial, residential/commercial and export sectors, Bentek analysts focused on project types posing the greatest market-altering potential if they grow simultaneously at their estimated paces:   

• Natural gas-fired power plants
• Ground and marine transportation
• Liquefied natural gas (LNG) exports
• Ammonia, methanol and nitrogen fertilizer production
• *GTL facilities, which convert natural gas and/or ethane into petroleum products

The report considers the viability of new and revitalized sectors given the inherent economics of each and expected market conditions between now and 2019.

"Given the magnitude of potential demand growth, it's critically important to provide a realistic assessment of industries that increasingly use natural gas as a fuel or feedstock in the production of other products," said Rocco Canonica, Bentek analyst and lead report author. "If demand growth reaches its full potential, we could expect a tighter U.S. market and upward price pressure – a sharp contrast to today's cheap and abundant natural gas from shale formations such as North Dakota's Bakken."

Bentek is tracking 14 gas-to-liquids (GTL)* projects in North America, including 13 in the U.S. and one in Canada, and as many as nine of these could be in service by 2019. There are more than a dozen announced projects in the U.S. that would use natural gas as feedstock to produce methanol for petrochemical production or other uses. Bentek expects that at least 10 of these will be built.

Many of these industrial applications, however, face a large number of risks, including project financing risk, commodity price risk, infrastructure constraints and competition from other demand sources for the same supply pool.

A cost-free overview of Bentek's Debunking the Alternative Gas Demand Myth may be accessed at this link: For full report access and purchasing, contact Katie Lowe at [email protected] or visit http://www.bentekenergy.com/AlternativeGasDemand.aspx.

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.

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 based in London with more than 1000 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 and McGraw Hill Construction. The Company has approximately 17,000 employees in 29 countries. Additional information is available at www.mhfi.com.

SOURCE Platts