November 6, 2012 / 6:22 PM / 7 years ago

UPDATE 1-EIA sees U.S. natgas output flat in 2013, trims demand estimate

* EIA sees 2013 gas output matching 2012's record high
    * 2013 gas demand seen down 0.47 bcfd (0.7 pct) from 2012

 (Adds consumption, LNG and price data, background)
    NEW YORK, Nov 6 (Reuters) - The U.S. Energy Information
Administration on Tuesday lowered its estimate for domestic
natural gas production in 2013, expecting output next year to be
unchanged from 2012's record-high levels.
    In its November Short-Term Energy Outlook, the EIA said it
expected marketed natural gas production in 2013 to average
68.84 billion cubic feet per day, matching the agency's slight
downward revision for output in 2012.
    Last month, EIA estimated that marketed gas production in
2013 would grow by 0.5 percent to 69.22 bcf per day, which would
have been the third straight year of record output.
    EIA said it expects small declines in production in coming
months related to recent drops in the rig count, but noted that
the associated gas produced in oil and liquids-rich areas will
partly offset the decline in drilling.
    The agency slightly lowered its estimate for consumption
next year, expecting demand to slip by 0.47 bcf per day, or 0.7
percent, from 2012 to 69.28 bcf daily.
    Expected declines in the electric power sector as gas prices
in 2013 become less competitive with coal should offset gains in
residential, commercial and industrial use, EIA said.
    Gas demand from the electric power sector spiked 22 percent
this year, primarily driven by the relative cost advantage of
gas over coal for power generation.
    The shares of total U.S. electricity generation fueled by
natural gas and coal during 2012 averaged 30.6 percent and 37.2
percent, respectively.
    EIA expects that prices for gas delivered to electric
generators during 2013 will average 22 percent higher than
during 2012, while the average cost of coal should be just over
1 percent higher.
    The projected higher price of natural gas relative to coal
should contribute to a decline in the share of total generation
fueled by natural gas to 27.2 percent next year and an increase
in the coal share to 40.1 percent.
    The EIA expects imports of liquefied natural gas (LNG) to
halve in 2012 to about 0.5 bcfd and remain near that level in
2013, as global shippers send more gas to higher-paying markets
in Europe and Asia.
    The EIA slightly increased its estimates for 2012 and 2013
Henry Hub natural gas prices NG-W-HH, expecting prices this
year to average $2.77 per million British thermal units and in
2013 $3.49 per mmBtu. 

 (Reporting by Joe Silha. Additional reporting by Edward
McAllister and Scott Disavino; editing by Sofina Mirza-Reid;
Editing by Phil Berlowitz and Sofina Mirza-Reid)
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