Editorial comment
Geopolitical events have led to a bullish outlook for global gas markets this year, a trend set to continue in the coming decades as demand for LNG grows. As well as developing gas field assets, this will require ongoing investment in infrastructure, including new pipelines to connect gas fields to LNG export terminals.
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With the US set to play a primary role in supplying LNG to meet international demand, especially in Asia and Europe, substantial investment and construction of new pipelines will be needed to ensure the Haynesville, Permian and Appalachia plays can drive continued production growth.
Between now and 2024, the Haynesville will be the primary driver of dry gas production growth in the US. During this period, the global gas market will remain tight, but we expect the Haynesville to continue accommodating the fundamental growth needed. There is a healthy amount of investment in infrastructure and pipeline takeaway commitments in the area, so it is unlikely we will see bottlenecks if all proposed projects move forward on schedule. Projects such as Louisiana Energy Access (LEAP) Expansion, Haynesville Global Access Pipeline (HGAP) and Louisiana Energy Gateway (LEG) will lay the foundation for long-term production and transport of the region’s dry gas resources. Beyond 2025, with the addition of LEG and possible new pipelines, such as the proposed Gulf Run expansion that could ramp up later in 2025, the basin should continue producing at a high level for years to come. This includes supplying new LNG export capacity as most large operators have at least 15 - 20 years of remaining core inventory.
Permian Basin activity levels support robust structural growth for the basin in the next few years. However, growth will be non-linear and impacted by pipeline takeaway capacity. In addition, we expect short-term regional balances to remain tight, with potential infrastructure bottlenecks as early as 2Q23. Increased supply potential is supported by additional pipeline projects, adding more than 6 billion ft3/d of incremental capacity, rising from current nameplate capacity of 17.5 billion ft3/d up to 23.8 billion ft3/d over the next two years. The region continues to push the upper bounds of growth potential and is set to be the second-largest regional contributor. We anticipate the Whistler Permian Highway and Gulf Coast Express expansions will add 1.7 billion ft3/d in additional pipeline takeaway in 2023. Beyond this, we do not expect any additional pipeline takeaway capacity until mid-2024, when Energy Transfer’s New Permian Pipeline is expected online, and the Matterhorn Express pipeline in mid to late 2024. Together, these two projects will add 4.5 billion ft3/d in 2024. Additional pipeline takeaway capacity will help keep regional price differentials in check while ensuring the Permian is set for robust growth. However, compared with the dry gas supply forecast, regional balances will remain tight.
While Appalachia has seen its ‘unfair’ share of project delays and cancellations, it still plays a vital role in the future of US gas production with some growth expected. The much-anticipated Mountain Valley Pipeline (MVP) currently under construction, along with planned pipeline projects Northern Access 2016 and Regional Energy Access, are expected to move forward and add just under 3 billion ft3/d, enabling the Northeast to potentially export over 38 billion ft3/d by 2025.
In summary, with several US infrastructure projects planned for the coming decade, Rystad Energy expects US gas production to rise 20% from this year’s levels by 2032, positioning the country as the world’s leading exporter over the long-term. This will be ideal from a geopolitical perspective: not only will it make the US an ongoing source of reliable supply, but global markets will significantly benefit from accessing US gas. We just need to see the pipelines and facilities completed to realise the country’s true potential.
