By Velda Addison, Hart Energy
The world’s hunger for natural gas might not be exceedingly high at the moment, but it’s good to know that a pair of sibling shale plays in the United States is making strides by growing supplies for use when and wherever needed.
Gas production in the Marcellus and Utica has accounted for 85% of the increase in gas production since 2012, the U.S. Energy Information Administration (EIA) reported July 28. Production levels were detailed in the EIA’s July Drilling Productivity Report, which delivers month-ahead projections for seven U.S. shale formations.
The report showed that the average new-well gas production per rig in the Marcellus region jumped from 3.2 million cubic feet per day (MMcf/d) in January 2012 to a projected 8.3 MMcf/d in July 2015.
Likewise, the Utica region, which includes the Point Pleasant shale formation, also saw big gains in rig productivity, the EIA said. Here, new-well gas production per rig jumped from an average of 0.31 MMcf/d in January 2012 to 6.9 MMcf/d.
Overall, production followed the same trend with both plays seeing substantial increases.
Production in the Marcellus region—which includes parts of the Utica and conventional formations underneath Pennsylvania and West Virginia—jumped from about 6.3 billion cubic feet per day (Bcf/d) in January 2012 to 16.5 Bcf/d in July 2015, the EIA said.
Total natural production gains in the Utica were even greater, nearly a whopping 18 times more for the same time frame. Output grew 0.15 Bcf/d to 2.6 Bcf/d.
So how did producers in the Marcellus and Utica regions make such a turnaround? The EIA pointed to four factors:
- Advanced drilling techniques;
- More hydraulic fracturing stages;
- Greater use of zipper fracks and
- Use of material that increase fracture size and rock porosity for targeted zones.
The growth comes despite the fact that the worldwide demand for natural gas has not kept pace with abundant supplies. Earlier this month, the International Energy Agency (IEA) revised down its natural gas projection mainly due to weaker gas demand in Asia.
Although the IEA said “lower prices will feed a pick-up in global natural gas demand over the next five years following a marked slowdown in 2013 and 2014,” the organization’s Medium-Term Gas Market Report revealed global demand could rise 2% annually, instead of the previously forecasted 2.3%.
Lower commodity prices aren’t helping the situation either.
The Henry Hub natural gas spot price has swung in the past five years. In January 2010, the price was $5.83 per million Btu (MMBtu). That dropped to $2.99 in January 2015. The price was $2.78 for June 2015.
Only time will tell what producers, including those in the Marcellus and Utica, will do given uncertain market conditions. But it’s reassuring to know that the supplies are there when needed.
Velda Addison can be reached at firstname.lastname@example.org or via Twitter @veldaaddison.
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