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Marcellus Region production growth

Hydrocarbon Engineering,

According to the US Energy Information Administration (EIA), natural gas production in the Marcellus Region was in excess of 15 billion ft3 through July.

The Marcellus region is the largest producing shale gas basin in the US, and accounts for approximately 40% of US shale gas production. The EIA explains that production in the region has increased dramatically over the past four years, increasing from 2 billion ft3/d in 2010 to its current level.

There have been approximately 100 rigs in the Marcellus region for that last 10 months. However, given the continued improvement in drilling productivity, EIA expects natural gas production to continue to grow. With 100 rigs in operation and with each rig supporting more than 6 million ft3/d in new well production each month, new Marcellus Region wells coming online in August are expected to deliver over 600 million ft3/d of additional production. According to the EIA, this production from new wells is more than enough to offset the anticipated drop in production that results from existing well decline rates, increasing the production rate by 247 million ft3/d.

Rising production in the Marcellus Region has outpaced growth in the region’s pipeline capacity, which has resulted in multiple pipeline expansion projects focused on removing bottlenecks. EIA highlights that as pipeline capacity is increased, markets in the Northeast gain greater access to Marcellus Region gas, which can result in stabilized or decreased prices.

Natural gas prices in the Northeast, such as the Dominion South trading point in southwestern Pennsylvania, have increasingly been below the Henry Hub price, in part because of increased access to Marcellus gas. According to the EIA, production in the Marcellus Region surpassed winter demand for natural gas in Pennsylvania and West Virginia several years ago and is now on track to be enough to equal the demand in those states plus New York, New Jersey, Delaware, Maryland and Virginia combined.

Adapted from a press release by Emma McAleavey.

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