U.S. Natural Gas Demand Set to Stay at Record High in 2025 and 2026 | OilPrice.com
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Breaking News:
Data centers and liquefied natural gas exports are set to keep natural gas demand in the United States at a record high this year and next, energy executives said at CERAweek. Infrastructure shortages, however, could make growth problematic.
“We have the gas, we just don’t have the pipelines to get it to places, so now you see a situation where it doesn’t matter how much we produce,” EQT’s Toby Rice told Reuters on the sidelines of the event in Houston.
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According to Rice, project cancellations and obstacles put in the way of new natural gas pipelines have led to higher electricity bills for Americans, at a rate of 35% over the last eight years.
The two main driving forces of greater natural gas demand this year and next would be artificial intelligence, which requires a lot of electricity, and LNG exports as the U.S. remains the top player in this field, with more production capacity set to come on stream in the next few years.
According to federal government projections, LNG production this year could average 105.2 billion cu ft daily—if the pipelines are there to carry the gas from the field to the liquefaction trains.
Yet LNG producers are not having it all easy. Earlier this week, Reuters reported that some U.S. LNG exporters were looking to raise their delivery prices in renegotiations of contracts with buyers as rising costs have reduced the profitability of LNG projects in recent years.
One of these is Energy Transfer, which is already in talks with buyers. “We don’t like those prices. So, yes, we are renegotiating those,” the company’s co-CEO Marshal McCrea told analysts during Energy Transfer’s latest earnings call.
Other LNG developers and exporters have also been trying to renegotiate contract prices with buyers amid a rise in construction, liquefaction, and labor costs in recent years. These costs have made the new projects more expensive than they were when initial plans were laid out.
By Charles Kennedy for Oilprice.com
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