EIA trims US gas output estimate

US recoverable gas resources grows06 August 2013, News Wires – The US Energy Information Administration on Tuesday trimmed its estimate for domestic natural gas production in 2013, but expects output this year to be up about 1% from 2012’s record-high levels.

In its August Short-Term Energy Outlook, the EIA said it expected marketed gas production in 2013 to rise 710 million cubic feet per day to 69.89 billion cubic feet per day, down from its July outlook of 69.96 Bcf daily, Reuters reported.

Despite the downward estimate, 2013 would still mark the third straight year of record US production.

Domestic output in 2014 is expected to set another record high, up 570 MMcfpd to 70.46 Bcf daily. The EIA had previously estimated 2014 production at 70.41 Bcfpd.

The agency, noting that the economics remain more favourable for onshore gas development, continues to expect production growth from onshore fields to more than offset declines in federal Gulf of Mexico output.

Imports of LNG are expected to remain at minimal levels of around 400 MMcfpd in both 2013 and 2014, EIA said.

EIA slightly lowered its estimate for 2013 consumption, but still sees usage climbing by 250 MMcfpd, or 0.4%, from 2012 to 69.93 Bcf daily.

It was the fourth straight month that the agency lowered its estimate for consumption growth this year, Reuters said.

In 2014, EIA said it expects total gas use slipping 620 MMcfpd, or 0.9%, to 69.31 Bcf daily “as increases in natural gas prices contribute to declines in gas used for electric power generation”.

EIA projected the share of electric generation fueled by gas in 2013 will average about 27.4%, down from 2012’s average of 30.4% as the higher gas prices prompt generators to burn more coal.

EIA forecast Henry Hub natural gas prices in 2013 to average $3.71 per million British thermal units, down 5 cents from its July estimate of $3.76 per MMBtu but 35% above 2012’s estimated average of $2.75 per MMBtu.

In 2014, EIA expects gas prices to rise 24 cents, or 6.5%, to $3.95 per MMBtu.

– Upstream

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