Natural Gas Intelligence
U.S. Gas Growth Seen Cutting Back Canadian, LNG Imports

Thursday, October 23, 2008

By next year the United States is expected to produce more natural gas than it's ever produced in history, and the new supplies will pressure pipeline systems and likely damage the prospects for Canadian imports and liquefied natural gas (LNG) facilities, said BENTEK Energy LLC CEO Porter Bennett.

Bennett was a keynote speaker Thursday at the LDC Forum Canada, which was held this year in conjunction with Canada's Industrial Gas Users Association. When he was first asked to speak a few months ago, he said he then had planned to discuss growing gas demand and shrinking gas supply. But that's not what the world looks like today, he told the audience in Toronto.

"Most people don't recognize that gas production is growing that quickly, certainly not the policy people," Bennett noted. "It's not only how much it's growing, but where it's growing. It's growing all over the place..." The new domestic gas has overwhelmed the U.S. pipeline infrastructure, which in turn has backed up Canadian imports, he said.

Through July, U.S. gas output is up nearly 9% from January-July 2007, he noted. Output is likely to be down for September because of the shut-ins from hurricanes Gustav and Ike, but by end of this year, "United States gas production will be up by at least 6% and more like 8-9% for the year...There's been a decline in U.S. demand, and supply is building in a significant way," he said.

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