Natural gas expected to continue growth after more than a decade of decline
Industrial use of natural gas is up 24% from 2009 levels of consumption after more than a decade of steady declines. Industrial facilities, including methanol plants and ammonia- or urea-based plants, consumed an average of 21.0 Bcf/d of natural gas in 2014. Several more major projects are expected to come online through 2018, continuing to push industrial use of natural gas even higher, according to the Energy Information Administration (EIA).
Low natural gas prices have made it a more attractive feedstock for the production of bulk chemicals. By the end of this year, industrial natural gas consumption is expected to reach an annual average of 21.7 Bcf/d, 3.4% higher than levels in 2014. Consumption by the end of 2016 is expected to be 3.9% higher about that, reaching 22.5 Bcf/d.
New fertilizer plants for the Gulf Coast, Iowa, Indiana, North Dakota drive projected NatGas demand growth
The additional industrial demand in 2016 is expected to be driven by three methanol plants coming online in the Gulf of Mexico with a combined capacity of about 0.4 Bcf/d. A large nitrogen fertilizer plant that is currently under construction on Louisiana’s Gulf Coast is also expected to use another 0.1 Bcf/d of natural gas once it comes online in 2016.
Several ammonia- or urea-based fertilizer plants are also being planned outside the Gulf region in agricultural areas as developers try to take advantage of higher domestic natural gas production. A larger fertilizer/urea plant in Wever, Iowa, is scheduled to come online later this year, two fertilizer plants are planned for towns less than 75 miles away in southern Indiana, and a fourth plant has been proposed in Mount Vernon, Indiana, for 2018. Each of these plants would use close to 0.1 Bcf/d, supporting continued growth in industrial natural gas demand.
In North Dakota, two ammonia-based fertilizer plants are proposed for 2018 and are both in the permitting phase. Each plant would use close to 0.1 Bcf/d of natural gas sourced from the Bakken Shale play.