05 December 2012 19:14 [Source: ICIS news]
HOUSTON (ICIS)--Planned new US ethylene crackers, as well as new fertilizer, gas-to-liquids (GTL) and methanol projects, could raise the country's industrial natural gas demand by more than 3 bcf/day by 2020, analysts said on Wednesday.
New ethylene crackers could add around 0.5 bcf/day to gas demand, methanol plants 0.3 bcf/day, fertilizer plants 1.0 bcf/day and GTL projects 1.4 bcf/day, Morgan Stanley said in a research note.
The analysts said that on the basis of all projects announced to date to take advantage of cheap ?xml:namespace>
However, many of these projects will not be realised because of high capital costs, environmental permitting challenges, feedstock competition and other factors.
In the chemical industry, the analysts expect that of the many cracker projects announced, eventually only six new world-class ethylene crackers will be realised - “with at least three new crackers as highly likely”.
The analysts therefore narrowed their forecast for incremental
But they added that gas demand growth may well turn out to be much larger, especially if
“We admit that the potential for an industrial renaissance in
As of now, Mexican pipeline capacity remains constrained, the analysts said. However, with the first round of new pipeline capacity expected on line as early as mid-2013 - and more to follow – “we could begin to see an industrial-driven surge in US export demand later in the decade”, they said.
Furthermore, potential economic benefits and opportunities for
In addition, the potential for industrial-linked gas demand may be larger than the market expects as a number of other heavy industries could seek to increase their use of natural gas if prices remain disconnected from the rest of the world, the analysts said.
“For example, many energy intensive industries - refining, cement and steel - may look to replace other forms of fuel, such as coal, coke, with natural gas, spurring demand without the construction of greenfield projects,” the analysts said.
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