Record natural gas production in the U.S. has pushed gas prices to their lowest level in 20 years, according to the latest issue of Natural Gas World Magazine published on Monday.
"U.S. Henry Hub gas prices this summer, between June 1 and Aug. 31, averaged just $2.28 per million British thermal unit (Btu), which was about 20% below summer 2018 and the lowest for two decades," Jeremy Bowden wrote in his article.
"They dipped as low as $2.02 per million Btu on Aug. 5, the lowest daily close since spring 2016," he added.
Natural gas production in the U.S. reached both daily and monthly record high levels during the month of August this year, according to the country's Energy Information Administration (EIA).
Daily natural gas production climbed to an all-time high level of 92.8 billion cubic feet per day (2.63 billion cubic meters per day) on August 19, 2019.
A monthly record in production was set in August 2019, when output averaged more than 91 billion cubic feet per day (2.58 billion cubic meters per day) for the first time in the country's history, according to the EIA.
Bowden said much of the natural gas produced today in the U.S. is associated gas from shale oil output, which increases with oil production, irrespective of gas prices.
"But when it [gas] is produced as a byproduct, the gas flows according to the oil economics – and at very low cost," he said.
In the Permian Basin, the most prolific shale basin in the U.S., there is widespread gas flaring due to rising oil and gas production and lack of export pipeline capacity, he added.
Cheap natural gas in the U.S. has also increased gas imports via pipeline and liquefied natural gas (LNG).
"U.S. exports of LNG now amounts to a tenth of the global market, and at 22 million metric tonnes so far this year, as end of August, is equal to the total volumes
pumped out in 2018, according to Refinitiv data," the magazine said.
Around 30 million metric tons a year of new LNG capacity is due to come online in the U.S. during the remaining of 2019, it added.
The U.S. has been exporting more natural gas than it imports on an annual basis since the year of 2017.
(Anadolu Agency)
