Steady gains expected in US natural gas production
A short-term market report published December 7 by the US federal government forecasts steady net gains in domestic natural gas production through to next year.
The US Energy Information Administration (EIA) said in its Short-Term Energy Outlook for December that dry natural gas production averaged 96.1bn ft3/d in November, a 1bn ft3/d increase from October and 4.2bn ft3/d above the average for the first half of the year.
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Through the December-March period, the EIA estimates natural gas production increases to 95.3bn ft3/d and finishes 2022 with an average of 96bn ft3/d
The Appalachia basin spread out over much of Ohio, Pennsylvania, New York and West Virginia is by far the most prolific gas reservoir in the continental US. If the December forecast from the EIA proves accurate, Appalachia would account for just over a third of total inland natural gas production.
Production gains in turn support US LNG export potential. The EIA put the November average for gas exported in liquid form at 10.7bn ft3/d in November, an 800mn ft3/d increase from October. For next year, it expects LNG exports will reach 11.5bn ft3/d, an increase of 17% from this year if the forecast proves accurate.
The EIA estimates that once new trains at the Sabine Pass facility in Texas and Calcasieu Pass terminal in Louisiana start service, US LNG export capacity will be the world’s largest by some point next year. The pace at which US LNG exports have increased, however, is slowing down, it added.
Pointing to the slow growth in new LNG exports and the increase in domestic natural gas production, the EIA said it expected Henry Hub, the US benchmark for the price of natural gas, to average $3.98/mn Btu in 2022, some 7% higher than current levels.