US Gas Production Seen Stalling in April
Monthly data from the US Energy Information Administration (EIA) finds that only two shale basins in the US – Haynesville and Permian – can expect a net increase in production next month.
The EIA in its monthly Drilling Productivity Report, published March 15, outlined the April forecast for production from the seven shale basins in the country: Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara and Permian.
EIA estimates show production from Haynesville, a shale reservoir sitting predominately in northern Louisiana, is on pace to increase by a modest 1% to 12.126bn ft3/day. Of the seven basins, the Haynesville sits third behind the Permian basin and Appalachia in terms of overall gas production. April output from the Permian basin in Texas is expected to increase by only 0.1% to 17.041bn ft3/day.
After spiking into the double digits due to the February freeze in Texas, Henry Hub prices are moving closer to seasonal norms. Henry Hub was trading closer to $2.50/mn Btu on March 16. Unlike the Permian, the Haynesville basin is key for US LNG exports because it is close to existing and planned Gulf Coast export terminals. Appetite for US LNG grew last year, particularly in the Asian economies.