A rise in North American LNG exports is expected to triple the region’s current natural gas market over the next decade, supporting 29 billion cubic feet per day (bcfd) of production from 2022 to 2033.
That’s according to a new report from the energy consultancy Wood Mackenzie that suggests new supply will put downward pressure on gas prices until LNG export facilities come online towards the end of the decade, creating an outlet to international demand centres.
Dulles Wang, Director, Americas Gas and LNG Research for Wood Mackenzie, said the expansion is equivalent to adding two new Permian basins. “As Europe diversifies to more secure supply sources and international buyers across the global seek reliable low-cost supply, North America is poised to deliver,” he stated.
According to the report, North American gas supply will return at a measured pace. While growth after this time period is expected to slow, a variety of incentives included in the Inflation Reduction Act (IRA) will support natural gas demand in the long term.
“As more investments are made in new technology, gas will play a key role in the decarbonisation of our energy industry, especially with the incentives provided by the IRA. It will ensure that natural gas will have a vital role to play for decades to come,” Wang added.
The report chimes with recent analysis by the research house McKinsey on North American gas supplying Europe in the years ahead. Last week the Federal Energy Regulatory Commission also approved a major LNG project in the US for the first time in two years.