industrial demand will surge in La. adding 23bcfd by 2020
http://www.rrc.state.tx.us/media/21944/t071414-external.pdf
Industrial demand will surge in LA.; Texas: Study
About 80 percent of 103 industrial projects that are likely to be built in Texas and Louisiana – potentially using 23.5 Bcf/d of natu- ral gas – will be built and completed by 2020, the Center for Energy Economics said Tuesday.
“It is just so easy to get things done here,” Michelle Michot Foss, chief energy economist and program manager for the Bureau of Economic Geology’s CEE, said in an email. The attractions are based on the two states’ coastal access, infrastructure for exports, and market centers for pricing, such as Henry Hub and the Houston Ship Channel for gas and Mont Belvieu for liquids, she noted.
She also expressed doubts about proposed gas-intensive projects in the Marcellus Shale in Pennsylvania and West Virginia, such as a proposed ethane cracker that Shell is considering for Pennsylvania. “Those folks are too late in the game,” she asserted.
She also disputed assertions that labor and supply shortages would delay the Gulf Coast projects. “Good projects are getting what they need. At a price, of course, but that is the EPC (engineer- ing, procurement and construction) world these days anyway,” she said.
Michot Foss said the center is tracking projects by their stage of development. “Confidence level goes up as milestones are met: front-end engineering design (FEED), final investment decision, permitting and groundbreaking. The most speculative projects are gas to liquids,” she said. “Most of the 103 projects are in some form of construction or close to it.”
She also said she doesn’t expect the ever-growing demand for gas to generate power will be a deterrent for future manufacturing growth in the region. “Industrials use gas for fuel and feedstock. Gas for power gen is either inside or outside the fence. Industrials are taking both,” she said.
In a report this week the CEE identified plants that it fully ex- pects will be built. They include the expansion of nine ethane crack- ers and five new crackers. CEE also said it believes that six metha- nol and 16 ammonia-urea-fertilizer plants will be built along with five gas-to-liquids plants. The CEE estimated the ethane crackers would cost $26 billion and produce 9.3 million metric tons/year of ethylene.
The study’s reference case anticipates 22 methanol and ammonia plants will be built by 2020 at a cost of $18 billion. The six metha- nol plants would have combined 5.9 million metric tons/year of capacity and cost $3.5 billion.
Sixteen of these plants will be able to produce mixes of ammo- nia, urea, ammonium nitrate and methanol, CEE said. Three of these plants have been completed for a cost of $4 billion; $5.4 billion has been invested in ten that are under construction and three are in the FEED stage. Seven that are in the planning stage are projected to cost $6.1 billion.
Among the seven GTL projects, five are either in the FEED or permitting stage, CEE said. Among those is the Sasol large-scale GTL facility at Lake Charles, Louisiana, which is projected to pro- duce 96,000 barrels/day.
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Replies to This Discussion
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Permalink Reply by jim weyland on
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that's a whole bunch of incremental demand! and only 6 years from now, wow!
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Permalink Reply by olddog573 on
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I'm glad to see positive articles like this especially with the slow down in drilling that's taken place around here. Thanks for sharing!
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Permalink Reply by adubu on
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If this becomes a reality--- that a 30% in daily demand and > 8 TCF more Nat Gas usage per year . That will truly increase need for more drilling and support Nat Gas prices. Will probably see storage draw down with increase prices before operators believe it and increase drilling to support. This will support Nat gas prices for years in $5 + range .LNG will export another 12-15 BCFD stating around same time. Then there is Mexico that US has contract for 2-3 BCFD beginning this year . So all and all there is a 40+% increase in demand just around the corner --- WOW That's better than any cold winter like last year.
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Permalink Reply by Andrew on -
Chenier's Sabine Pass export terminal alone will consume about 2 BCF/d once it's at full capacity. Sasol's GTL facility in Westlake will consume another 1 BCF/d. 3 BCF/d combined from just two projects would be significant, considering that the entire US daily consumption is projected to be around 73 BCF/d by the time both projects are online.
Now if we could just get the country to start fueling more automobiles on methane...
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Permalink Reply by adubu on
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I believe about 10-12bcfd LNG has been approved for export and under construction at this time that will be online in next 3-5 years
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Permalink Reply by tc on
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Other than Sabine Pass, I don't think any other LNG facility is under construction and it won't be ready for export until early 2016. It will 2020 before the US starts exporting over 5 bcf/d.
From Freeport LNG
How long will it take to construct the proposed liquefaction facilities at the Quintana Island terminal?
Freeport LNG anticipates an approximately 45-month construction period to complete commissioning and achieve full commercial operations of the initial train of the liquefaction project. Each subsequent liquefaction train is anticipated to commence full commercial operation at approximately six-month intervals thereafter.
http://www.freeportlng.com/Liquefaction_FAQs.asp#howlong
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