EIA expects 4% increase in US gas production next year
US natural gas production is on pace to set a new annual record this year and an increase of 4% is expected in 2022, the acting head of the Energy Information Administration testified November 16.
The Energy Information Administration (EIA) said in its monthly market forecast for November that dry natural gas production averaged 91.9bn ft3/d during the first half of the year and flirt with 95bn ft3/d from November through March.
“This year we expect to see production grow by more than 2% (from 2020) and establish a new annual record,” EIA acting administrator Stephen Nally told the Senate Energy and Natural Resources Committee. “In 2022, we see natural gas production growing by another 4%.”
The latest drilling productivity report from the EIA shows the Appalachia basin, spread out over parts of Ohio, Pennsylvania, New York and West Virginia, is the nation’s largest inland natural gas producer by far. By itself, it accounts for about 34% of total U.S. natural gas production.
“But we do not expect natural gas production to grow further in Appalachia unless additional pipeline capacity is built that can move natural gas outside of the region,” Nally said. “The majority of US natural gas production growth will occur in the Permian basin of Texas and New Mexico and in the Haynesville shale in Arkansas, Louisiana and Texas.”
The latter areas are close to LNG export terminals and natural gas pipelines to Mexico.
The EIA reported piped natural gas exports to Mexico averaged 5.4bn ft3/d for the week ending November 3. Twenty-two vessels laden with natural gas in liquid form left US export terminals that week carrying 80bn ft3 of product.
On prices, Nally said the EIA expects Henry Hub, the US benchmark for the price of natural gas, to hold at current levels through the winter season, which runs from November to March. Henry Hub closed trading November 17 at $4.81/mn Btu. EIA expects Henry Hub will average $4.00/mn Btu in 2022.