Natural gas flows to the United States’ seven LNG export plants are set to reach a 10-month high this Wednesday, according to data from financial firm LSEG. The increase in feedgas is largely attributed to the testing of equipment at Venture Global LNG’s Plaquemines plant in Louisiana. Once operational, Plaquemines will become the nation’s eighth major LNG export facility, with analysts predicting production could begin any day now. Last year, the U.S. surpassed Qatar and Australia to become the world’s largest LNG exporter.
However, U.S. gas production overall has seen a decline in 2024. From January to September, U.S. shale gas production fell by 1% year-on-year to 81.2 billion cubic feet per day (Bcf/d), while other dry natural gas production grew by 6% to 22.1 Bcf/d. In total, U.S. dry natural gas production averaged 103.3 Bcf/d during the same period, essentially unchanged from 2023.
The drop in production can be attributed to low natural gas prices earlier in the year, which led producers to scale back output. Significant reductions were observed in the Haynesville and Utica shale plays. From January to September 2024, shale gas production in the Haynesville decreased by 12%, or 1.8 Bcf/d, and in the Utica by 10%, or 0.6 Bcf/d, compared to the previous year. Meanwhile, shale gas production in the Permian increased by 10%, or 1.6 Bcf/d, and production in the Marcellus, the top U.S. shale play, remained stable.
The U.S. Energy Information Administration (EIA) points to high drilling costs in the Haynesville as a key factor in the production drop. Wells in the region, which reach depths of 10,500 to 13,500 feet, are particularly costly to drill. In September 2024, Haynesville’s shale gas production fell to 13.0 Bcf/d, a 14% decline from the peak of 15.1 Bcf/d in May 2023. The Haynesville remains the third-largest shale gas-producing area in the U.S., following the Marcellus and Permian regions.
Related Topics: