North America Natural Gas Market Outlook by Supply and Demand, Production Breakdown and Trade Activity, 2022-2027
The total natural gas production in North America is anticipated to grow at least 5% by 2027 from 2022 levels. Most of the natural gas production is likely to originate from unconventional gas basins in both the US and Canada. Furthermore, the natural gas supply exceeding its demand in North America has also enabled growth in the US natural gas exports between 2020 to 2022. This excess natural gas supply provides flexibility to Canada and the US to deliver natural gas to other regions relying heavily on LNG including China, Japan, and South Korea. Furthermore, some European countries such as France and Spain also depend on North American natural gas imports.
North America Natural Gas Production – Supply and Demand
The US contributed over 80% of the total natural gas production in North America in 2022, followed by Canada and Mexico. The total natural gas demand for 2022 was estimated to be 109 bcfd, thus generating an excess natural gas supply of at least 24 bcfd. With Asia emerging as the key natural gas importer, the US and Canada are likely to continue leveraging this opportunity and expanding their LNG exporting capabilities. North America is anticipated to remain reliant on natural gas production despite the growing pressure toward transitioning to renewable energy sources.
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North America Natural Gas Production Breakdown by Resource Type
The region is anticipated to continue having a significant share of production from unconventional shale plays at a slower rate compared to the past decade. By the end of 2022, the natural gas production share from unconventional plays would be over 60%. In North America, the Appalachian Basin contributes over 30% of the natural gas production, followed by the Permian Basin with a 19% production share.
North America Natural Gas Production Analysis, by Resource Type
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North America Natural Gas Demand Outlook
- US Natural Gas Demand and Power Generation: Natural gas market will be negatively impacted as renewables become more competitive for power generation.
- Canada Natural Gas Demand and Power Generation: Canada will rely heavily on hydropower, but with an increasing demand for natural gas for the power sector. Canada’s domestic natural gas consumption will grow over 8% by 2027, supported mainly by the power generation sector, and the higher retail demand from residential, industrial, and commercial sectors. The country widely uses natural gas in the upstream segment, power generation, residential and industrial segments.
- Mexico Natural Gas Demand and Power Generation: Despite the pandemic, Mexico’s natural gas is expected to witness a rise of more than 9% by 2027 compared to 2022. This increase is related to natural gas substituting coal and oil in power generation. Several gas infrastructure projects are now in the pipeline and the government is collaborating with major utilities such as Canada’s TC Energy Corp to develop natural gas pipelines.
Mexico Power Generation and Capacity
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North America Natural Gas Supply Outlook
- US Supply – Natural Gas Production and LNG Export: US takes advantage of Europe’s high LNG Spot prices as domestic production increases. US natural gas production achieved an average annual growth of more than 1% between 2022 and 2027. The growth will be primarily driven by the sustained rise in energy demand from the industrial sector.
- Canada Supply – Natural Gas Production and LNG Liquefaction: Canada’s growing natural gas production, mainly from unconventional basins, is to be used for LNG export purposes. Due to the muted growth in demand for natural gas in Canada, most of the natural gas production is planned for liquefaction to increase the country’s LNG export capacity.
- Mexico Supply – Natural Gas Production and Imports: Unlike the US and Canada, Mexico’s domestic natural gas production will be reduced by 27% through 2027, thus increasing its reliance on imports. This will be driven primarily due to exploration underinvestment in the country and lower US natural gas prices.
US Natural Gas Production Breakdown by Play
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North America Natural Gas Market Report Overview
|Regions Covered||North America|
|North America Natural Gas Outlook||Supply and Demand, Natural Gas Production Breakdown, Natural Gas Trade Activity|
|Natural Gas Demand Outlook for North America||US Natural Gas Demand and Power Generation, Canada Natural Gas Demand and Power Generation, Mexico Natural Gas Demand and Power Generation|
|Natural Gas Supply Outlook for North America||US Supply – Natural Gas Production and LNG Export, Canada Supply – Natural Gas Production and LNG Liquefaction, Mexico Supply – Natural Gas Production and Imports|
Table of Contents
North America Natural Gas Outlook
• North America Overview – Supply and Demand
• North America Overview – Natural Gas Production Breakdown
• North America Natural Gas Trade Activity
Natural Gas Demand Outlook for North America
• US Natural Gas Demand and Power Generation
• Canada Natural Gas Demand and Power Generation
• Mexico Natural Gas Demand and Power Generation
Natural Gas Supply Outlook for North America
• US Supply – Natural Gas Production and LNG Export
• Canada Supply – Natural Gas Production and LNG Liquefaction
• Mexico Supply – Natural Gas Production and Imports
Frequently Asked Questions
Appalachia Basin accounts for the maximum natural gas production in North America followed by the Permian Basin.
The North American natural gas production is segregated into unconventional gas, unconventional oil, conventional gas, and conventional oil depending on the resource type.
China, Japan, and South Korea relying heavily on LNG will be benefitted from the natural gas imports. European economies including France and Spain will also leverage from imports.
The US will contribute over 80% of the natural gas production in North America.
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