EIA: Marine LNG Purchases to Hit Seven Percent by 2030

The U.S. Energy Information Administration (EIA) has released its Annual Energy Outlook 2019, making the prediction that although some price swings and fuel availability issues are expected when the 2020 IMO sulfur cap regulations take effect in 2020, by 2030 more than 83 percent of international marine fuel purchases in U.S. ports are expected to be for low-sulfur compliant fuel. The share of LNG is expected to increase from negligible levels in 2018 to seven percent in 2030.

Natural gas prices are expected to remain comparatively low based on historical prices during the period up to 2050, leading to increased use of the fuel and increased LNG exports.

Natural gas production from shale gas and tight oil plays as a share of total U.S. natural gas production
is expected to continue to grow in both share and absolute volume because of the sheer size of the associated resources, which extend over nearly 500,000 square miles, and because of improvements in technology that allow for the development of these resources at lower costs.

Offshore natural gas production in the U.S. is expected to remain nearly flat during the period up to 2050 as production from new discoveries generally offsets declines in legacy fields.

The U.S. became a net natural gas exporter on an annual basis in 2017 and continued to export more natural gas than it imported in 2018. Overall, the U.S. is predicted to become a net energy exporter in 2020 and remain so throughout the projection period as a result of large increases in crude oil, natural gas, and natural gas plant liquids (NGPL) production coupled with slow growth in U.S. energy consumption. Of the fossil fuels, natural gas and NGPLs have the highest production growth, and NGPLs account for almost one-third of cumulative U.S. liquids production during the projection period.

U.S. LNG exports and pipeline exports to Canada and Mexico are anticipated to increase until 2030 and then flatten through 2050 as relatively low, stable natural gas prices make U.S. natural gas competitive in North American and global markets.

After LNG export facilities currently under construction are completed by 2022, U.S. LNG export capacity is expected to increase further. Asian demand growth allows U.S. natural gas to remain competitive there. After 2030, U.S. LNG is no longer as competitive because additional suppliers enter the global LNG market, reducing LNG prices and making additional U.S. LNG export capacity uneconomic.

The report is available here.