WTI-to-natgas ratio to exceed 15 through 2015 - US consultant

23 March 2011 22:14  [Source: ICIS news]

HOUSTON (ICIS)--The price ratio of West Texas Intermediate (WTI) to natural gas will remain well above 15 through 2015, the president of an energy consultancy said on Wednesday.

The ratio will remain so high because of the advent of shale gas in North America, said Bill Sanderson, president of Purvin & Gertz.

Sanderson made his comments during CMAI's World Petrochemical Conference.

In fact, much of the future natural-gas production in North America will be driven by shale gas, he said.

Shale-gas development itself is still in its early stages, said Alan Armstrong, president of Williams, a US-based company that produces, distributes and processes natural gas.

Armstrong was also speaking at the CMAI conference.

Over the years, companies such as Williams have developed nonconventional reserves of natural gas, learning how to lower production costs.

Ethane production will follow gas production, although there is typically a lag, Williams said.

Ambiguous regulations, however, remain one of the industry's biggest threats, Armstrong said.

"Regulations must be clear, certain and effective to maximise the opportunity," he said.

Natural gas is used as both a fuel and a feedstock in North America.

The CMAI conference lasts through Thursday.

By: Al Greenwood
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