In the next 10 years, natural gas demand in the U.S. will rise 27 percent and supply will increase by 38 percent, according to a study by Bentek Energy. The liquids-rich shale plays of Texas and the Midcontinent, including the Williston Basin, will contribute roughly 44 percent of the expected natural gas supply growth during that 10 year time period, the report also noted. The gas production in both regions is an important trend to watch, the report said. “These plays hold tremendous potential, and growth from these areas could exceed current expectations.”
Bentek Energy points to the Utica shale as a driving force behind a massive change in natural gas flows and price spreads. “Based on our latest modeling, the U.S. is embarking on a true sea change,” said Rocco Canonica, energy director for the company’s energy analysis division. “The Northeast is poised to switch from the nation’s largest demand region to a net supply region, and the U.S. Southeast is racing to become a much larger net demand region after being a major supplier to the U.S. gas market.”
Between 2013 and 2023, the U.S. will increase natural gas production to 9.1 billion cubic feet per day, the report said, one-third of which will come from the Utica and Marcellus shale formations. Over the same period, the Southeast will be responsible for roughly half of all demand growth, a number that could reach 9.4 billion cubic feet per day.
“With a large amount of oil and NGLs in the production stream, producers can earn high rates of return regardless of gas price direction,” Bentek said in an overview of its report. “Consequently, gas production growth from all of these areas will further exacerbate oversupplied conditions until demand rises and pipelines are built to bring burgeoning supply to markets.”