The Growth of U.S. Shale Gas and The Primary Component Exports – What Can Be Expected?

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As 2016 gets well underway the U.S. shale gas production and distribution developments continue. Drilling technology, takeaway pipeline capacity, fractionation capacity, natural gas liquids (NGL) terminal capacity, liquefied natural gas (LNG) exports, ethane exports, liquefied petroleum gas (LPG) exports – all are progressing. That’s not to indicate the current soft prices and supply / demand imbalances aren’t having an impact on gas drilling rates and overall related investments. In first quarter 2016 U.S. natural gas prices have been at 15 year lows and below $2.00 per million BTU (MMBTU) while crude oil prices have seen increases from prices below $30 / Barrel (Bbl). Overall, the shale gas production and distribution developments are progressing as they feasibly should in a transforming industry. The developments associated with shale gas asset investments and logistics capacity requirements are detailed in PLG Consulting’s SHIELD (Shale Gas Industrial Expansion Logistics Database) product.

On the supply side of the developments, the technology integration of horizontal drilling and hydraulic fracking is extensive and well into the optimization phase. The demand side has partially developed and will accelerate rapidly in 2016 and 2017 with new export terminals, ethane crackers, propane dehydration (PDH) units, etc. being brought online. Finally, the midstream infrastructure (pipelines, transfer terminals, shipping vessels, logistics assets, etc.) is in place or well along. The overall developments continue to align with PLG Consulting’s three phase, Industrial Expansion model overviewed in a previous article (Shale Gas International Magazine – Issue 2) The stage is set for downstream expansion in earnest.

To overview the to-date and near-term progress, Figures 1 and 2 show the U.S. Energy Information Administration’s (EIA) projection for U.S. shale gas growth and NGL growth, respectively.

Magazine Issue 2 Cover
The full article, by Tim Rhoads – PLG Consulting, is available in Issue 3 of Shale Gas International Magazine and can be found on page 16.

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