October 12, 2011 / 4:03 PM / 8 years ago

EIA again lifts US natgas production growth estimate

* EIA sees 2011 gas output up 4.16 bcfd from 2010
    * 2011 gas consumption seen up 1.24 bcfd from 2010
    Oct 12 (Reuters) - The U.S. Energy Information
Administration on Wednesday slightly raised its estimate for
growth in domestic natural gas production in 2011, expecting
output this year to gain 6.7 percent from 2010 levels.
    In its October Short-Term Energy Outlook, the EIA said it
expected marketed natural gas production to rise by 4.16
billion cubic feet per day in 2011 to a record 65.99 bcf daily,
compared with its September forecast of 65.79 bcf daily.
    It was the fifth straight month the agency increased its
estimate for 2011 gas output.
    The EIA said the entire growth in 2011 gas output stemmed
from increases in onshore production in the lower 48 U.S.
states, which will more than offset a year-on-year decline of
nearly 1 bcf per day in Federal Gulf of Mexico production.
    Gas production has been growing steadily since 2005,
primarily because of the boom in horizontal drilling in onshore
unconventional shale formations.
    The EIA said it expected production to continue to grow in
2012 but at a slower pace, rising another 1.38 bcf daily, or
2.1 percent, to 67.37 bcf per day.
    Domestic gas output this year should easily set an all-time
high, eclipsing the previous record, hit in 1973, of 62.05 bcf
daily.
    The EIA trimmed its forecast for U.S. natural gas
consumption growth this year for a third straight month,
expecting average demand to rise 1.9 percent from 2010 to about
67.23 bcf per day, versus its prior estimate of 67.29 bcf
daily.
    Growth in the industrial and electric power sectors should
back 2011 consumption gains, with record heat in the third
quarter stirring a healthy increase in demand for
air-conditioning across much of the nation.
    In 2012, the EIA sees total consumption rising another 0.7
percent to 67.69 bcf daily, again backed mostly by continued
growth in industrial and electric power demand.
    The EIA's 2012 demand estimate was up only slightly from
its previous forecast of 67.67 bcf per day.
    The agency recently said changes to its methodology in
collecting and reporting consumption data should not
significantly change reported annual total consumption volumes,
but it did expect significant changes in the seasonality of
reported residential and commercial demand volumes.
    High liquefied natural gas demand and prices in Asia have
coaxed most spot cargoes to the Pacific Basin this year,
denting imports in the low-priced U.S. market.
    U.S. imports of liquefied natural gas are expected to fall
25 percent to 0.9 bcf per day this year, down from 1.2 bcfd in
2010, the EIA said. Imports in 2012 are expected to fall
further, to 0.7 bcfd.
    EIA expects Henry Hub natural gas prices NGc1 in 2011 to
average $4.15 per million British thermal units, down 5 cents
from its previous estimate and 24 cents below last year's
estimated average of $4.39.
    In 2012, the EIA sees prices rising 17 cents, or 4.1
percent, to $4.32 per mmBtu.
 (Reporting by Joe Silha in New York; Additional reporting by
Edward McAllister in New York; Editing by Dale Hudson)
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