The past few years have seen considerable turbulence when it comes to gas pricing. In mid-2014, Henry Hub futures contracts were stable above US$4 per million British thermal units (US$110.64 per 1,000 cubic metres), with many predicting that this level would remain constant for some time.

In 2016, however, a drop to below US$2 per mmBtu (US$55.32 per 1,000 cubic metres) owing to a lack of demand and abundant shale gas supply put a large number of producers under considerable pressure. At current prices of around US$3 per mmBtu (US$82.98 per 1,000 cubic metres), some of this pressure has been relieved, but margins remain tight and competition is intense.

For chemicals makers, fertiliser producers and domestic customers, though, this has been a boon. Feedstock prices have fallen, allowing firms to remain competitive despite major new facilities coming online in countries such as Saudi Arabia. Meanwhile, many home users are paying up to 50% less for their gas supplies than they were in 2008. 

Despite this, shale gas production is now rising again after a slowdown last year. And even then, the Marcellus shale saw output rise by 11% to a record 5.1 tcf (144.4 bcm) in 2016 despite fewer wells being drilled as technology improved, longer laterals were drilled and new efficiency gains were achieved. 

Similarly, the Utica play has also boomed, while over in Louisiana, the Haynesville shale has seen output climb consistently every month since October 2016. Meanwhile, with new pipeline capacity coming online, many of the bottlenecks that have constrained production but supported gas prices in the past could be about to be removed.

http://www.youroilandgasnews.com/lng+exports+hold+promise+for+us+sh...

Views: 150

Reply to This

© 2017   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service