EIA: U.S. Will Hit New Monthly Natural Gas Production Record in 2022

Researched by Industrial Info Resources (Sugar Land, Texas)--In its most recent Short-Term Energy Outlook, the U.S. Energy Information Administration (EIA) forecasts that U.S. dry natural gas production will increase from 95.1 billion cubic feet per day (Bcf/d) in October 2021 to 97.5 Bcf/d by December 2022, setting a new record high for monthly production.

The previous monthly record was set in November 2019, at 97.2 Bcf/d. U.S. natural gas production had been increasing before the COVID-19 pandemic arrived in early 2020, after which demand for natural gas rapidly declined along with prices, leading to a decline in production activity, with a low of 87.3 Bcf/d reached in May 2020.

According to the EIA, monthly U.S. natural gas production figures have risen since then, with an exception occurring in February 2021, when Winter Storm Uri curtailed production in Texas.

Generally speaking, natural gas is produced from wells dedicated primarily to gas production, such as those in the Haynesville, Utica and Marcellus areas, and those that produce associated gas from crude oil production, such those in the Permian Basin and Bakken Shale.

As oil production increases, so does the production of associated natural gas. In addition, new gas gathering and processing facilities in these oil-producing regions allow for the increased capture of gas. According to the EIA, oil output from the Permian Basin is expected to hit a record high next month, coming in for the first time at more than 5 million barrels per day. Along with this comes more associated gas.

The flaring of gas from oil wells in North Dakota's Bakken Shale and Three Forks formation has been declining. North Dakota regulators report that from January through September this year, the rate of natural gas flaring declined to an average of 7.5%. This decline led to producers capturing 92.5% of associated gas, meeting the state's goal of 91%. Before natural gas capture targets took effect in 2014, the state was flaring more than 30% of the gas produced.

The rise in North Dakota's amount of gas captured is the result of better gathering infrastructure and the construction of a new processing facilities. According to the North Dakota Industrial Commission, natural gas processing capacity in the state increased from 1 Bcf/d in 2013 to 3.4 Bcf/d in 2020. It is expected to exceed 4 Bcf/d by the end of this year. ONEOK Incorporated (NYSE:OKE) (Tulsa, Oklahoma) completed its Bear Creek II gas processing plant in North Dakota earlier this year. The new train will process up to 200 million cubic feet per day. With the plant's completion, ONEOK now has approximately 1.7 Bcf/d of processing capacity in North Dakota's Williston Basin. Subscribers to Industrial Info's Global Market Intelligence (GMI) Production Project Database can click here for the detailed project report.

Gas processing plants that are wrapping up construction in the U.S. include Energy Transfer LP's (NYSE:ET) (Dallas, Texas) grassroot Revolution cryogenic natural gas processing plant in Bulger, Pennsylvania, which will allow for both the cleaning up of dry gas and the fractionation of natural gas liquids. The facility will have a processing capacity of 440 million cubic feet per day. Subscribers can click here for the project report.

Industrial Info is tracking several projects involving oil and gas production from wells in the U.S., both onshore and offshore. Examples of dedicated dry gas production from onshore gas-producing regions include Jonah Energy LLC's (Denver, Colorado) 2022 drilling program in Wyoming, representing Year 4 of a 10-year program, which will include drilling 350 wells using three single well pads. Subscribers can click here for the project report.

Offshore production platforms under construction in the U.S. include Royal Dutch Shell's (NYSE:RDS-A) Vito platform (The Hague, Netherlands), which will produce both oil and gas. The platform, which is being constructed in water more than 4,000 feet deep, will have a throughput capacity of 100,000 barrels per day of crude oil and 100 million cubic feet per day of natural gas from eight subsea wells. The platform is expected to be completed this summer. Subscribers can click here for the project report.

Drilling programs in the Permian, which will include the production of both oil and associated gas, include U.S. Energy Development Corporation's (Arlington, Texas) 2022 drilling program in the Wolfcamp Production Field, which will include three 12,000- to 14,000-foot-deep horizontal wells, and is expected to kick off next summer. Subscribers can click here for the project report. Gas processing plants under construction in the region include Pinnacle Midstream LLC's (Houston, Texas) 200 million-cubic-foot-per-day Dos Picos plant in the Midland area. Construction kicked off earlier this year and is expected to wrap up next summer. Subscribers can click here for the detailed report.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.