A major independent producer group has painted a rosy outlookfor short- and long-term growth of domestic gas demand and supply.U.S. gas demand is expected to rise by one percent to 22.23 Tcf in1998, eclipsing the previous consumption peak achieved in 1972, andlikely will hit 23 Tcf in 2000, according to forecasts issued atthe Independent Petroleum Association of America’s (IPAA) Oil andGas Investment Symposium in New York Tuesday.

The depressed crude oil prices have not affected the picture forgas. “…[W]e have seen a fundamental disconnect between oil andnatural gas prices. The gas markets are balanced, strong andgrowing,” said IPAA Chairman George Yates of Harvey E. Yates Co. inRoswell, NM.

The industrial and electric utility sectors will register themost growth this year with 2.2% and 3.2%, respectively, IPAA said.In the long term (2000-2010), U.S. gas demand is projected to growat a healthy annual clip of 1.7%, totaling 27.2 Tcf in 2010.Largely owing to electricity deregulation, theIPAA anticipatesthat much of the long-term growth in natural gas will come from theelectric utility sector and sees its share of the market reaching5.1 Tcf by 2010. Once imports and storage are factored in, totalgas demand in 2010 has been pegged at 30.9 Tcf.

At the same time, domestic gas production is expected tocontinue increasing at an average annual rate of 1.5% through 2000and will continue at a 1.4% annual pace through 2010. Although thisis a slower rate than that shown for demand, total gas outputshould hit 19.8 Tcf by 2000 and – thanks to recent successes in thedeep-water Gulf of Mexico – should increase to 22.7 Tcf by 2010,IPAA noted.

Total gas imports, mainly from Canada, have risen atdouble-digit rates since 1991, but they are forecast to slow to2.5% this year largely due to pipeline constraints, according tothe producer group. They are expected to rise to 3.5 Tcf by 2000,up from 2.9 Tcf in 1997. By 2010, IPAA estimates natural gasimports will account for more than 16% of domestic gas demand at4.4 Tcf.

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