New chemical plants expected to boost industrial natural gas demand by 4% in 2015
Oct. 1, 2014--Industrial natural gas consumption has grown steadily since 2009, as relatively low prices have been attractive to
customers who use natural gas as a feedstock for chemical production. Methanol plants and ammonia- or urea-based
fertilizer plants are among the most natural gas-intensive industrial end users, with many using 100 million cubic feet
per day (MMcf/d) or more. Low gas prices and proximity to shale resources have led to proposals for several new
Two methanol plants are set to begin service this year — a small facility in Pampa, Texas, and one in Geismar,
Louisiana. A handful of fertilizer plants have begun service, and an expansion is planned at a plant near Beaumont,
Texas, later this year.
Many plants are on the Gulf Coast, but proximity to shale development in the Marcellus, Bakken, and Niobrara areas
have led to proposals for facilities outside of Texas and Louisiana. Two large facilities coming online in 2015, a
methanol plant in Clear Lake, Texas, and a fertilizer/urea plant in Wever, Iowa, will support continued growth in industrial
demand. EIA projects growth in industrial demand will continue through 2015, with consumption averaging 21.3 billion
cubic feet per day in 2014 and 22.1 Bcf/d in 2015, a 4% increase.
Developers hope to take advantage of abundant natural gas in the Bakken Shale. Two ammonia-based fertilizer plants
are proposed for North Dakota for 2018. Farm-owned cooperative CHS Inc.'s proposed plant in Spiritwood and
Northern Plains Nitrogen's proposed plant for Grand Forks are both in permitting stages. Both have expected
production of 2,400 tons of ammonia per day and would use close to 100 MMcf/d of natural gas each, according to
Bentek Energy estimates.
While most of the proposed methanol plants are on the Gulf Coast, two are proposed for 2018 in the Pacific Northwest.
Northwest Innovation Works, a Chinese company, is planning two methanol facilities on the Columbia River in
Washington and Oregon. The company hopes to export methanol produced in the United States to Asian markets.