New nitrogen plants to grow gas demand: EIA

OREANDA-NEWS. New nitrogen fertilizer plants will contribute to growth in US industrial natural gas demand through 2016, according to the Energy Information Administration (EIA).

The EIA forecasts that industrial gas use will increase by 3.4pc from 2014 consumption to an average of 21.7 Bcf/d by the end of 2015. It expects consumption to grow an additional 3.9pc in 2016 to an average of 22.5 Bcf/d. US industrial facilities consumed an average of 21 Bcf/d of natural gas in 2014, a 24pc climb from 2009 and reversing a decade-long trend of lower consumption.

Lower natural gas prices because of the US shale boom has resulted in a rush of nitrogen plant projects, which use the resource as a feedstock to produce ammonia that is either sold directly for agricultural use or upgraded to products like urea or UAN.

There are nine ammonia expansion projects, ranging from greenfield plants to debottlenecks, that have begun construction in the US, totaling an estimated 5.2mn st/yr in additional gross ammonia production, a 32pc rise from existing North American capacity.

New methanol projects are also expected to add to increased industrial natural gas demand. The EIA said three new Gulf Coast methanol plants will be on line in 2016, accounting for a combined 0.4 Bcf/d of consumption.