There may be some light at the end of the tunnel mitigating recent concerns about the ability of U.S. natural gas supply to keep pace with demand growth. "Gas production from the deepwater Gulf of Mexico is set to rise at an increasing rate, beginning this year," says Steve Enger, analyst for Petrie Parkman & Co., Denver. The firm projects-based on a bottom-up analysis of every Gulf field in greater than 1,000 feet of water-production increases, net of decline, of 700 million cubic feet per day in 2003, followed by subsequent increases of 1 billion cubic feet (Bcf) per day and 600 million cubic feet per day in 2004 and 2005, respectively. The key Gulf fields adding to 2003 gas production are the Canyon Express Project, which includes the Aconcagua, Camden Hills and King's Peak fields; the Nansen/Boomvang Field; and the Falcon Field, the analyst says. In 2004, production from the Falcon/Harrier Field will continue to ramp up, aided by the start-up of the Harrier Field. Concurrently that year, the Nakika, Gunnison and Marco Polo fields are expected to come onstream. "The first of the large ultradeep [Gulf] oil fields begin producing in 2005, specifically Thunder Horse, Mad Dog and Holstein, which along with Magnolia will provide the largest increments of gas [output] that year," says Enger. Looking back, the analyst notes that daily deepwater Gulf gas production has grown from less than 1 Bcf in 1996 to 3.7 Bcf in 2002. "We see no reason for that trend to change," he says. "In fact, our bottom-up projection calls for accelerating growth." While deepwater Gulf gas certainly won't solve the U.S. gas-supply problem, it will play an important mitigating role during 2002-05, concludes Enger. "For perspective, it would take at least 150 rigs drilling for gas in the U.S. to produce the same increment of growth, indicating the importance of focusing on the deepwater component." -Brian A. Toal