"Despite 2% p.a. demand growth for gas – primarily driven by growth in LNG exports – low cost production from shale gas/oil is expected to keep North American prices below $2.8/mmbtu for decades to come.”

Combining our deep insights with data from several proprietary forecasting models, this outlook explores the key drivers impacting North American gas markets. New pipelines will allow Appalachian gas to supply new markets, fundamentally altering North American gas flows. Associated gas from the Permian will add low cost gas to the supply mix but requires additional pipeline investment. International factors like LNG and exports to Mexico will increasingly affect the US market. Despite weak global LNG prices US LNG plant utilization will remain at ~80% due to relatively low costs. In the near term, coal retirements provide an opportunity for gas, but longer term falling renewable costs slow gas demand for power generation.

COMPLIMENTARY SUMMARY

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North American Flow and Basis Model

The North American Gas Outlook to 2030 was developed using findings from our North American Flow and Basis Model, which incorporates supply, demand, and pipeline networks to derive flow patterns and market price basis through 2030. The model covers 57 gas pricing nodes and 156 flow paths, with the objective of minimizing total transportation cost.


EXPLORE THE MODEL


Explore the drivers of North American gas demand growth by sector through 2030.






KEY FINDINGS

1. Exports account for ~69% of US and Canada demand growth by 2030

From 2017 to 2030, LNG and exports to Mexico grow by over 17 bcfd and account for ~69% of US and Canada gas demand growth

2. US LNG liquefaction facilities utilization will average 80% from 2018 to 2024

Despite a weak global LNG market, US LNG utilization is relatively high due to lower costs and flexible contracting

3. North America can produce enough gas to meet 25+ years of demand below $2.8/mmbtu

There are ~900 Tcf of recoverable resources that have a breakeven of less than $2.8/mmbtu, ensuring low-cost gas in North America for decades to come

4. In the near-term gas replaces coal generation, although longer-term gas faces more competition from renewables

Over the next ~5 years, gas gains market share from coal with over 26 GW of coal capacity expected to retire. Spurred by falling costs, renewable generation is expected to increase and slow gas demand growth for power

5. Gas generation will need to become more flexible as intermittent renewables increase share in the power mix

Since renewable generation cannot reliably be called upon to meet intra-day changes in power demand, gas infrastructure must be able to supply multi-bcfd changes in demand to ensure the lights stay on, especially during peak hours




WHAT'S IN THE REPORT

Historical recap (2005-2016)

A review of the how the rise of shale gas has changed North American supply, demand, pipeline flows and prices

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Demand outlook to 2030

Analysis examining sector-specific demand with deep dives focusing on LNG exports, gas-renewable competition in the power sector, industrial demand as well as exports to Mexico

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Supply outlook to 2030

Includes a detailed production forecast and breakeven costs by sub-play with additional analysis on how midstream elements will impact Appalachian and Permian production

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Price outlook to 2030

High-level discussion of future gas price trends and implications on how gas will flow in the future

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bomb cyclone



RELATED INSIGHT


US natural gas market reaction to the ‘Bomb Cyclone’

March 2018 | In early January, a winter storm popularly known as a Bomb Cyclone caused unprecedented levels of natural gas demand as heating needs rose, pushing gas prices to record highs.




Purchase of the full North American Gas Outlook to 2030 includes a comprehensive PDF report as well as 20+ Excel data tables to complement the tables illustrated in the report.

BUY THE OUTLOOK


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