Despite a dip earlier in the year, natural-gas prices remained steady over 2017, averaging $2.99/million Btu. According to the US Energy Information Administration (EIA), the decrease in natural-gas price in 2017 was because of the warmer winter and lower gas usage for power generation, which led to lower demand.
According to the latest figures from the International Energy Agency, the year-over-year aggregate gross consumption (production plus imports minus exports and stock changes) for US natural gas was up 5.7% in October 2017. Rising demand from Mexico coupled with lower gas prices and greater pipeline capacity resulted in US exports increasing by 0.4 Bcf/D in 2017, and they are expected to increase by a further 0.6 Bcf/D in 2018. In 2017, the US also became a net exporter for the first time since 1957 when taking annual figures into account.
Early 2018 has been a different story, however, with natural-gas prices already hitting a couple of peaks (of greater than $5/million Btu according to the Henry Hub Spot Price history). In the US, colder-than-expected temperatures contributed to peaks in demand, but, at the time of writing, the prices have settled down to the pre-“bomb cyclone” levels, with current natural-gas prices almost mirroring those in 2017 (at $2.868/million Btu). The Henry Hub Natural Gas Spot Prices are projected to average $2.88/million Btu in 2018.
The EIA predicts that natural-gas usage for residential and commercial purposes will likely increase by 1.3 Bcf in 2018. Industrial consumption is also expected to rise by 1.2% this year, with an average of 21.7 Bcf/D. Dry-natural-gas production is expected to rise to 6.9 Bcf/D (9.3%). Most of the growth in natural gas is expected to be in the Marcellus, Utica, and Permian basins. Similarly, for liquefied natural gas (LNG), the forecasts are rosy, with an expected average rate of 3.0 Bcf/D in 2018. This is because of an expected increase in production from the Cove Point terminal in Maryland and additional facilities coming online this year—namely, the Elba Island facility in Georgia and the Freeport LNG plant in Texas.
A novel hybrid solvent for acid-gas removal improves the handling of sour natural gas by effectively dealing with mercaptans present without the need for modifying facilities and with no adverse effects on the sulfur-recovery units down the line. This enables the whole process to be more economical and efficient while meeting the necessary health, safety, and environment requirements.
To learn more, visit the 2018 SPE Annual Technical Conference and Exhibition in Dallas on 24–26 September and the 2018 SPE Asia Pacific Oil and Gas Conference in Brisbane, Australia, on 23–25 October.
This Month's Technical Papers
Comparison of Various Offshore Industrial Gas Technologies
Natural-Gas-Liquids Recovery—Retrofit Breathes New Life Into Old Scrubber
Hybrid Solvent Helps Ease Bottlenecking in Natural-Gas Plant
Recommended Additional Reading
SPE 186394 Investigation of Failed LNG Boil-Off Gas-Transfer-Line-Expansion Bellows Using Finite-Element-Analysis Approach by E.Y. Pratama, PT Badak LNG
SPE 186932 From Sandface to Processing Plant, an Integrated View of an Operating Envelope in a Gas/Condensate System by M. Sueiro, Repsol, et al.
SPE 188347 Overcoming Challenges To Reduce H2S Content in Sales-Gas-Transmission Pipelines by JagannathRao PrakashRao Allamaraju, Abu Dhabi Gas Industries, et al.
