November 8, 2011 / 6:36 PM / in 6 years

UPDATE 1-EIA sees 2012 US natgas production up 2 pct from 2011

* EIA sees 2012 gas output at record-high 66.9 bcfd
    * 2012 gas demand seen up 0.8 bcfd (1.1 pct) from 2011
 (Adds consumption, LNG and price data, background)
    NEW YORK, Nov 8 (Reuters) - The U.S. Energy Information
Administration on Tuesday said it expected domestic natural gas
production in 2012 to be up 2 percent from 2011's record-high
levels.
    In its November Short-Term Energy Outlook, EIA said it
expected marketed natural gas production in 2012 to rise by 1.3
billion cubic feet per day to a record 66.9 bcfd, down slightly
from its October outlook that had output next year at 67.37 bcf
daily,
    For 2011, the EIA lowered its outlook for marketed gas
production for the first time in six months, expecting output
this year to average a record high 65.6 bcf per day, a 3.8 bcfd
or 6.1 percent gain from 2010.
    In its October forecast, the EIA had gas production this
year at 65.99 bcf per day.
    Domestic gas output this year will easily set an all-time
high, eclipsing the previous record, hit in 1973, of 62.05 bcf
daily.
    The EIA said the 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
bcfd, or 17 percent, 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 raised its forecast for U.S. natural gas
consumption growth in 2012, expecting average demand to rise by
0.8 bcfd, or 1.1 percent, from 2011 to about 67.9 bcf per day,
versus its prior estimate of 67.69 bcf daily.
    The agency lowered its estimate for consumption this year
for a fourth straight month, but still expects demand to climb
1.7 percent from 2010 to about 67.1 bcf per day, versus its
prior estimate of 67.23 bcf daily.
    Growth in the industrial and electric power sectors helped
drive 2011 consumption gains, with record heat in the third
quarter stirring a healthy increase in demand for
air-conditioning across much of the nation.
    High liquefied natural gas demand and prices in Asia have
drawn 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 still 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 NG-W-HH in 2011
to average $4.06 per million British thermal units, down 6
cents from its previous estimate and 33 cents below last year's
estimated average of $4.39.
    In 2012, the EIA sees prices rising only slightly to $4.13
per mmBtu, down 19 cents from its previous forecast.
 (Reporting by Joe Silha in New York; additional reporting by
Eileen Moustakis in New York; editing by Andrea Evans)
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