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Thanks to the shale revolution, by 2022 the U.S. will be on course to challenge Australia and Qatar for the world’s top gas exporter status, the International Energy Agency (IEA) said in a new report published on Thursday.
The U.S.—currently the world’s biggest gas producer and consumer—will account for 40 percent of the additional gas production in the world by 2022 “thanks to the remarkable growth in its domestic shale industry”, according to the IEA.
“By 2022, US production will be 890 bcm, or more than a fifth of global gas output. Production from the Marcellus, one of the world’s largest fields, will increase by 45 percent between 2016 and 2022, even at current low-price levels, as producers increase efficiency and produce more gas with fewer rigs,” the international agency said.
U.S. domestic demand for gas is rising due to higher demand from the industry, but more than half of the production increase would go to LNG for export, the IEA reckons.
On the other hand, global gas demand is seen growing by 1.6 percent annually over the next five years, with China expected to represent 40 percent of gas demand growth.
Industry is outpacing power generation as the main driver of gas demand growth, the IEA said.
“The US shale revolution shows no sign of running out of steam and its effects are now amplified by a second revolution of rising LNG supplies,” the IEA’s Executive Director, Dr Fatih Birol, said. “Also, the rising number of LNG consuming countries, from 15 in 2005 to 39 this year, shows that LNG attracts many new customers, especially in the emerging world. However, whether these countries remain long-term consumers or opportunistic buyers will depend on price competition.”
Since Cheniere sent America’s first LNG cargo abroad in early 2016, U.S. gas exports have reached buyers in Latin America, Europe, Asia, and even the Middle East.
As of May 1, 2017, the Federal Energy Regulatory Commission (FERC) had approved 7 export U.S. terminals that are currently under construction, plus another 4 approved not under construction yet.
Earlier this year, the EIA said that the United States is expected to become a net exporter of natural gas on an average annual basis by 2018, driven by declining pipeline imports, growing pipeline exports, and increasing LNG exports.
In terms of production, the EIA’s Short-Term Energy Outlook from July 2017 shows that dry natural gas production is forecast to average 73.3 billion cubic feet per day (Bcf/d) in 2017, a 1.0 Bcf/d increase from 2016. Dry natural gas output is expected to further increase by an average of 3.1 Bcf/d in 2018.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.