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Exports soar, U.S. to be major global natural gas supplier

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Staff writer ▼ | June 24, 2016
Demand for U.S. natural gas for export is set to skyrocket through the next few decades, a U.S. Department of Energy official said, adding the country was on a path to become a top supplier to the international market.
Natgas supplier
Exports soar   Carmine Difiglio, DOE deputy director:
"We're going to have substantial increase in pipeline exports to Mexico and LNG exports are going to explode," Carmine Difiglio, DOE deputy director for energy security, said at Hart Energy's DUG East Conference in Pittsburgh.

U.S. gas production peeked last year at an average of around 80 Bcf/d before beginning to decline somewhat. However, the production drop-off is expected to be short-lived as demand for gas for export increases, Difiglio said, Platts reports.

"We expect the growth will resume on a fairly steady basis and reach 83 Bcf/d by the end of 2017," he said.

Difiglio noted that the dramatic increase in shale gas production over the last decade and a half is responsible for growing gas supplies beyond what is needed to meet U.S. demand.

Shale gas has grown from being less than 5% of total US gas supplies in 2000 to 56% of supplies today, he said.

"The Marcellus and Utica shale basins continue to be the most productive for natural gas and especially impressive is the increase between last July and now," Difiglio said.

"Year-on-year growth from 2015 to 2016 was greatest in Pennsylvania, Ohio, West Virginia, Oklahoma and North Dakota, but production was declining in the rest of the United States."

While natural gas prices, which over the past several years have declined substantially in line with oil prices, are starting to come back up, Difiglio said there were signs that the increase would be gradual over the span of several years.

"As production has been maintained and prices have been coming down, our storage now is very high and this will be a factor going forward in price recovery," he said.

Difiglio said that as pipeline imports from Canada decline, the US is poised to become a major gas exporter.

"A number of important LNG export projects are underway," he said, predicting that US gas exports would reach 10 Bcf/d by 2022 and double that volume to 20 Bcf/d by 2040.

"We're expected to become one of the biggest gas exporters by 2022, only second to Qatar."

By comparison, the U.S. in 2015 exported 1.78 Tcf (4.88 Bcf/d), according to the Energy Information Administration.