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    EIA Sees US Gas Production, Exports Increasing

Summary

The US Energy Information Administration is forecasting increased natural gas production and exports in 2018 and 2019 on the heels of reduced gas use in 2017.

by: Dale Lunan

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EIA Sees US Gas Production, Exports Increasing

The US Energy Information Administration (EIA), in its latest Short Term Energy Outlook (STEO) released January 9, is forecasting increased natural gas production and exports in 2018 and 2019 on the heels of reduced gas use in 2017.

LNG exports will also grow in 2018, the EIA says, as the Cove Point terminal in Maryland ramps to full capacity and six of 10 small trains at the Elba Island facility in Georgia enter service.

But the agency is expecting US natural gas prices to remain in the doldrums for at least the next couple of years, with the marker price at Henry Hub forecast to decline slightly next year.

After jumping to $3.10/’000 ft3 in 2017 from $2.61/’000 ft3 in 2016, the EIA is forecasting gas at Henry Hub will average only $2.99/’000 ft3 in 2018, before recovering slightly to $3.03/’000 ft3 in 2019.

“Prices are expected to decline slightly from 2017 levels based on strong expected production growth, which EIA forecasts will meet growing domestic consumption and exports,” the STEO said.

Dry gas production is forecast to rise 9.3% in 2018 compared to 2017, to a record 80.42bn ft3/day from 73.57bn ft3/day, and to climb again in 2019, to 83.02bn ft3/day.

“If achieved, the forecast 6.9bn ft3/day increase in 2018 would be the highest on record,” the EIA said. “Growth is expected to be concentrated in Appalachia’s Marcellus and Utica regions, along with the Permian Basin region.”

Growing Appalachian production is rooted largely in improved pipeline takeaway capacity, which contributes to higher wellhead prices and encourages production growth.

Gross LNG exports are forecast to average 3.03bn ft3/day in 2018, up from 1.94bn ft3/day in 2017, and to climb again in 2019, to some 4.82bn ft3/day. The first train at Freeport LNG in Texas is expected in service by the end of 2018, while 2019 will see the commissioning of the four remaining trains at Elba Island, the two remaining trains at Freeport LNG, two trains at Cheniere’s Corpus Christi, Texas facility and three trains at Cameron LNG in Louisiana.

Meanwhile, natural gas consumption is forecast to increase by 3.5bn ft3/day in 2018 and by 2.2bn ft3/day in 2019 after slipping by 1.06bn ft3/day in 2017, the STEO shows. Total consumption in 2018 is projected at 77.53bn ft3/day, rising to 79.72bn ft3/day in 2019.