SHREVEPORT, Louisiana –The Haynesville Shale is expected to lead gas production growth in 2023, Enverus General Manager of Power & Renewables Bernadette Johnson said on March 29 at Hart Energy’s DUG Haynesville Conference.
“As you fast forward to 2024 it shrinks pretty significantly,” she said of production growth. “Basically, from where we are today, we expect it [production] to stay pretty level until we get some additional demand and takeaway capacity.”
Johnson said more Haynesville production growth was expected in the outer years between 2025 and 2027.
“And that’s tied really closely with the price pressure we are seeing today and the market working,” Johnson said, adding that Enverus also envisions some inventory challenges in the play by the end of the decade.
In 2022, gross gas withdrawals in the Haynesville region in Louisiana and Texas rose by 2 billion cubic feet per day (Bcf/d) to 15.3 Bcf/d, or around 13% of total U.S. gross gas withdrawals, the U.S. Energy Information Administration (EIA) reported on March 29.
The Haynesville offers operators a strategic location to drill for gas due to its proximity to the U.S. Gulf Coast, where demand from U.S. LNG export terminals and industrial facilities has been growing, EIA said.
Russia’s invasion of Ukraine in February 2022 boosted demand in Europe for U.S. LNG imports amid a reduction in energy imports from Russia, which has faced continued sanctions from Western powers from the EU to North America.
Within the U.S. southern region, Johnson said “Permian associated gas will grow this year, [and] we’ll continue to keep an eye on infrastructure and takeaway options out the region, but we’re seeing bottlenecks start to rematerialize in the late 2026 timeframe.”
Enverus’ bearish outlook over the near-term
Permian natural gas production associated with oil drilling will overwhelm the market until 2025 or beyond as new LNG projects continue to ramp up.
Enverus expects almost 15 Bcf/d of new gas to show up by the end of 2027, with two-thirds of that demand tied to LNG demand.
Johnson said Enverus was bearish on the strip until LNG buildouts start to erode storage surplus.
“Storage is a strong indicator that we have too much gas,” she told attendees to the conference. “We are bearish on the near-term until around 2026, then we are quite bullish.”
“Demand is the constraint. Demand is the ceiling,” Johnson said.