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    Permian drove US gas output growth: IEA


Easing of pipeline constraints critical to continued growth. [Image: ConocoPhillips]

by: Dale Lunan

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Natural Gas & LNG News, Security of Supply, Market News, News By Country, United States

Permian drove US gas output growth: IEA

Dry natural gas production in the US increased by about 5% year-on-year through the first nine months this year, the International Energy Agency (IEA) said October 10 in its latest medium-term gas market report, with associated gas from the Permian Basin accounting for much of the growth.

On average, daily production remained above the 100bn ft3/day (about 2.8bn m3/day) threshold, but y-o-y growth of 5% in the first two quarters of the year slowed to about 2% in Q3 2023.

Permian output reached a record high of 17.7bn ft3/day in July, the IEA said, while total production through July gained 10% over last year.

“The Permian Basin alone accounted for 30% of incremental natural gas production in the United States over the first eight months of 2023,” the IEA said in its report. “This expansion is the result of sustained drilling activity in the region, with 466 wells drilled on average per month in 2023, or 8.3% more y-o-y than in July 2022.”

But further expansion of production, the IEA says, will depend on continued debottlenecking of pipeline capacity out of the basin. Several pipeline projects are slated for completion this year, including the Permian Highway Pipeline, the Whistler Pipeline and the Gulf Coast Express, which together could add 17bn m3/year of takeaway capacity by the end of 2023.

In the Appalachian Basin, meanwhile, production recovered from an initial contraction in the first half of the year to grow by 0.5% y-o-y in July. 

The basin accounted for about 30% of all US production through nine months this year and will benefit from some increase in takeaway capacity as the long-delayed Mountain Valley Pipeline adds about 20bn m3/year of transmission capacity.

With US storage levels high and domestic demand expected to slow, the IEA said, overall US gas production is forecast to grow by only around 2% for all of 2023.