HOUSTON, Nov 20 (Reuters) - New coal-fired generation plants and higher LNG imports are likely to limit increases in the price of North American natural gas over the next two years, energy consultant Wood MacKenzie said on Friday.
In 2010, gas prices are expected to average $4.50 per million British thermal units (mmBtu), edging up to $5 per mmBtu in 2011, the firm said.
Gas for delivery at benchmark Henry Hub was about $3 per mmBtu on Friday.
Pressure on gas prices will come from the last wave of new coal-fired generation. About 19 gigawatts of capacity are being built and scheduled to come on line between 2009 and 2012.
Also, a series of disruptions at liquefied natural gas plants around the world in 2009 meant less was sent to North America, but a jump in supply from new projects in the next two years will push imports here, the firm said.
Gas prices are expected to jump to about $7 per mmBtu in 2013 and 2014 as production is forced to grow quickly to meet increased demand sparked by the economic recovery. Strengthening global markets are also expected to pull LNG cargoes away from North America, WoodMac said.
The development of the vast shale gas fields in North America supports long-term supply growth, but prices may jump as high as $10 per mmBtu in 2013 and 2014, lifted by U.S. carbon legislation that tilts demand toward cleaner-burning natural gas and possible weather.
“Shale gas doesn’t shield us completely from price volatility,” Jen Snyder, principal analyst for North American Gas at WoodMac, told a media briefing. (Reporting by Anna Driver in Houston; Editing by Christian Wiessner)