Net production among all the major U.S. natural gas production basins will grow at a rate of better than 1% annually, or 2 Bcf/year, through 2020, according to a report by Calgary-based consultant Ziff Energy Group. The report looked at 17 major gas-producing areas, including the Gulf of Mexico (GOM).

Some of the major mature areas like the GOM will continue a steady slide downward, while the unconventional plays will more than make up for that, according to Ziff Senior Vice President Bill Gwozd.

The price assumptions behind the production growth projections are the same ones Ziff has used for several years, which call for modest, but no spiked, increases, Gwozd said. Ziff projects prices will exceed $5.00/Mcf by 2020.

While the GOM once accounted for nearly one-quarter of all U.S. gas supplies, it will be “ground downward to a whisper of itself,” Gwozd said. The latest report calculates that production in the Midwest and Appalachian regions will become some of the strongest in North America.

The GOM is the largest declining area while Appalachian areas, which include the Marcellus and Utica shales, are the biggest forecasted production growth areas.

“GOM is the yin and Appalachia is the yang in U.S. gas production,” he said. As an example, Ziff’s analysis shows that GOM production of about 10 Bcf/d in 2000 could be less than 2 Bcf/d in 2020.

“With the shrinking of some and the growing of others, we still see overall gas production growth, meaning that North America will not have to import the large quantities of gas that were being forecast as recently as five years ago,” according to the report’s authors Lev Virine and Simon Mauger.

The report identifies “hot spots” where production, rig counts and efficiency will be rising, as well as the areas that are going to trend downward over the next seven years. The GOM Outer Continental Shelf region will lead the declines, while the Utica, Marcellus, Haynesville and Eagle Ford plays will be the high-growth areas.

Ziff’s review of the 17 basins found that in some cases there is a blending, with the “Rockies” including the Piceance, Green River, Powder River, etc. The report identifies sub-basins within the broader regions. What is labels as “Appalachian” includes both the Utica and Marcellus.

Without the Haynesville Shale, the region encompassing Texas-Louisiana production would be in decline, but with it, there is continued growth, Gwozd said. With these variations, prices will fluctuate, too. “They can go up or down; it depends on locations.

“In North America as a whole, we think there are a lot of factors that are pushing gas prices up and a few factors pushing them down. Some of the factors pushing them up include the decline of conventional gas supplies, incremental supplies for power generation increasing demand, incremental gas for the Alberta oilsands projects, and industrial incremental gas demand is rising with the global price differential between North American supplies and the rest of the world.

“Pushing prices down are only a few factors, such as the emergence of shale gas, huge new supplies from this source, the continued development of more tight gas and the push for tight oil raising the production of associated gas.”

©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.