The Appalachian Basin continues to drive U.S. natural gas production, with the Energy Information Administration (EIA) reporting in its October Drilling Productivity Report that the Marcellus and Utica gas shale plays have increased gas production by 11 MMcm/d (398 MMcf/d) month over month so far this year. Those production levels represent about a 14% increase over November 2016 natural gas production in the Appalachian Basin, according to the EIA.

In fact, through September the Appalachia region was producing more than 11.2 MMcm/d (398 MMcf/d) month-over-month, the EIA reported. Naturally, the region’s rig count is beginning to rebound as well. The Marcellus/Utica well count peaked in 2012—when natural gas prices were more than $4—at about 150 operating rigs. Following the collapse of commodity prices, that number fell to about 30 in mid-2016. But according to the Baker Hughes rig count, the number of operating gas rigs has more than doubled since mid-2016, with 75 operating oil rigs in the Appalachian Basin.

One of the key drivers in the increase of the Appalachian Basin’s natural gas production is the development of key midstream infrastructure, the EIA reported.

“In the Appalachian region the increase in shale gas production since 2010 has spurred development of new midstream infrastructure, including pipelines and natural gas processing plants,” the EIA reported. “Between 2010 and 2016 EIA estimates natural gas processing capacity in Kentucky, Ohio, Pennsylvania and West Virginia has grown from 1.1 billion cubic feet per day (Bcf/d) [31.1 MMcm/d] to 10 Bcf/d [283 MMcm/d]. The additional capacity to process natural gas has supported growth in production of both natural gas and NGPLs [natural gas plant liquids], with natural gas production in those states increasing from 56.6 MMcm/d (2 Bcf/d) in January 2010 to 6.4 Bcm/d (22.9 Bcf/d) in May 2017, and NGPL production increased from 106,000 barrels per day (bbl/d) to 621,000 bbl/d over the same period.”

Questions? Contact Brian Walzel at bwalzel@hartenergy.com.

Comments