SNL Energy
Analyst: Eagle Ford, Marcellus altering gas supply/demand equation

Wednesday, January 16, 2013

Increasing gas production from the Eagle Ford and Marcellus shales could permanently alter which regions of the country are gas importers and which are exporters and lead to gas-on-gas competition, BENTEK Energy LLC's senior storage analyst said Jan. 15.

Speaking at Platts' Gas Storage Outlook conference in Houston, Logan Reese said the Eagle Ford and Marcellus remain two of the more economical plays for gas production, even though a large percentage of Eagle Ford gas is associated production related to liquids drilling. In spite of that, Reese said BENTEK expects Texas and Gulf Coast gas production to increase by 2 Bcf/d by early 2014 and 6 Bcf/d by early 2017.

"We're seeing very little dry gas growth," he said. "If gas prices return in the next few years, there will be a great upside. These are very conservative projections, in my opinion."

Reese said increasing demand for gas in the industrial sector has been "not significant," and there has been a minimal increase in gas demand for power generation in Texas. "We've seen very little growth [of gas-fueled power] in the last couple of years. … There's really nothing going on right now," he said. "They're not consuming more in Texas, more materially, to offset this increased production."

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