Demand for natural gas around the globe and domestically will continue to rise dramatically, particularly in the LNG sector, the analyst said in the opening presentation of Hart Energy’s two-day DUG Gas Conference & Expo on March 19 in Shreveport, Louisiana. (Source: Shutterstock)
People watching the energy market have seen a major change over the last year in what could be summarized as the rise of “energy pragmatism.”
Amol Wayangankar, principal and founder of Enkon Energy Advisors, originally didn’t understand the phrase and had to ask a fellow in another market sector about what it meant.
“He said that’s a code word for ‘we can’t get rid of gas and oil yet,’” Wayangankar recalled. “And I said, ‘Yet?’”
Demand for natural gas around the globe and domestically will continue to rise dramatically, particularly in the LNG sector, the analyst said in the opening presentation of Hart Energy’s two-day DUG Gas Conference & Expo on March 19 in Shreveport, Louisiana.
The event features discussions on the energy industry as a whole with a focus on the natural gas industry in the Haynesville Shale.
Wayangankar took a look at the driving factors in natural gas demand. While the need to power AI data centers has garnered a lot of media attention lately, the analyst said the demand for LNG will be the driving factor for the next decade in natural gas.
"Power demand will not match LNG demand, it will be significantly lower, but everything adds up in the end," he said.
Globally, natural gas will play a leading role in the energy transition, as countries wean themselves off of coal-fired power plants to cut greenhouse gas emissions. The U.S. offers some of the most competitively priced and abundantly supplied LNG on the global stage, making a growing LNG manufacturing capacity the base load for natural gas.
“LNG production will be at 34 Bcf/d by 2033,” Wayangankar said. “Think about that, it was 13 Bcf/d a year ago.”
The estimates for power supply are less certain in the market. The analyst looked at electricity demand estimates of ERCOT, the Texas power grid, as an example. Current power demand estimates from the grid expect a doubling of demand to 150 gigawatts by 2030.
It is highly unlikely the state will be able to permit and build all of the power supplies to meet that demand, regardless of what is used to produce the power.
And over the last decade, while gas production has ballooned, available storage has had little to no growth.
The situation is likely to lead to price volatility, he said, as storage levels rise and fall quickly to supply outgoing LNG cargoes.
“Natural gas storage is going to be an asset class with a lot of value,” he said.
Recommended Reading
Crescent Energy Closes $905MM Acquisition in Central Eagle Ford
2025-01-31 - Crescent Energy’s cash-and-stock acquisition of Carnelian Energy Capital Management-backed Ridgemar Energy includes potential contingency payments of up to $170 million through 2027.
Petro-Victory Buys Oil Fields in Brazil’s Potiguar Basin
2025-02-10 - Petro-Victory Energy is growing its footprint in Brazil’s onshore Potiguar Basin with 13 new blocks, the company said Feb. 10.
Apollo Funds Acquires NatGas Treatment Provider Bold Production Services
2025-02-12 - Funds managed by Apollo Global Management Inc. have acquired a majority interest in Bold Production Services LLC, a provider of natural gas treatment solutions.
VAALCO Acquires 70% Interest in Offshore Côte D’Ivoire Block
2025-03-03 - Vaalco Energy announced a farm-in of CI-705 Block offshore West Africa, which it will operate under the terms of an acquisition agreement.
ENGIE Adds 900 MW Solar, Storage to Portfolio from Ares Management
2025-03-25 - The addition brings ENGIE North America and Ares Management’s partnership to 3.7 gigawatts of investment in U.S. generation.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.