For 2011 it will be more of the same where low natural gas prices and the gas-crude oil price relationship are concerned, according to analysts at Fitch Ratings.

"A continuation of low natural gas prices would have negative implications for processors with long natural gas positions and pipelines with gas-retention tariffs," Fitch said. "Intrastate pipeline volumes and profits are also expected to remain modest in a low-price environment with limited basis differentials."

For domestic gas production to decline in response to current market prices, Fitch said a number of things have to happen. These include:

Longer term, Fitch said an improved economy and a weaker dollar, which would drive exports higher, as well as increased demand for gas among power generators, would support overall gas demand and prices.

"Beyond price levels, the shift to shale and particularly liquids-rich plays is already beginning to have an impact on some [midstream] operators, although it remains unclear where the net gains and losses will be," Fitch said. "Future Marcellus [Shale] production will likely displace traditional supply sources while recently completed interstate pipelines, such as the Rockies Express, further increase the supply of natural gas in the Midwest and Northeast and contribute to the changing dynamics."

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