US natural gas demand
US natural gas demand is expected to grow 40% from 80 Bcfpd (billion cubic feet per day) to 112 Bcfpd, according to WoodMackenzie’s North America gas markets long-term outlook spring report.
Natural gas demand growth is expected to be driven by LNG (liquefied natural gas) exports and demand from the power sector. Natural gas demand for LNG exports is expected to grow from 2 Bcfpd in 2017 to 14 Bcfpd in 2027.
The global demand for LNG is expected to increase ~35% through 2022. Much of this demand growth is expected to come from China and South Asia.
Similarly, the demand for natural gas from the power sector is expected to rise from 25 Bcfpd in 2017 to 32 Bcfpd in 2027. Notably, ~51% of total power plant retirements through 2022 are coal-fired. At the same time, ~61% of announced power capacity additions are from natural gas–fired plants.
The chart above shows the top contributors to the expected natural gas demand growth. The graph also shows the expected growth in natural gas supply from key basins over the next ten years.
With significant natural gas operations, as discussed in the previous article, Kinder Morgan (KMI), Williams Companies (WMB), and ONEOK (OKE) are expected to benefit from this natural gas demand-supply trend in the long term.
In the rest of this series, we’ll compare the key metrics of these three S&P 500 midstream companies to see which currently looks the best.