The Minerals Management Service (MMS) released results of astudy evaluating the role of the federal Outer Continental Shelf(OCS) in supplying future U.S. gas demand. Results were presentedat an industry symposium held in Houston yesterday.

Predictions by the U.S. Energy Information Administration (EIA)and the National Petroleum Council indicate U.S. gas demand couldreach 30 Tcf by 2010. The 1998 gas production, including syntheticgas, in the U.S. was only 19 Tcf. About 3 Tcf of imports fromCanada and a minuscule LNG import (0.1 Tcf) met gas demand for thatyear, MMS said. Planners are concerned as to where the additional11 Tcf of supply is to come from.

At present, more than a quarter of the nation’s gas productioncomes from the OCS, primarily the Gulf of Mexico (GOM). Most comesfrom the Continental Shelf (from less than 200 meters of water).However, production from the slope and deeper water is steadilyincreasing. Concerns have been expressed that the productiondecline rate, which has been cited as high as 50% for the Shelf,may significantly reduce production from the GOM. An analysis ofproduction data for the last ten years dispels that notion, MMSsaid.

While production rates from earlier completions have declinedsignificantly, higher production from newer completions offsets anydecline. The per-completion production rate for non-associated gashas remained steady at around 1Bcf per completion, and theproduction rate of the associated gas has increased steadily duringthe last 10 years from about 0.11 MMcf to about 0.16 MMcf percompletion.

More than 75% of total GOM monthly production comes fromcompletions that are 4 years old or younger. To sustain or increaseproduction, a robust drilling and completion rate needs to bemaintained. The present gas and oil price and the availability ofgood prospects ensure such an activity, MMS said. The agencyspeculated gas production from the Gulf may grow from 5.1 Tcf/yearto a maximum of 6.7 Tcf by 2012.

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