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Marcellus gas production reaches all-time high

WHEELING, W.Va. – When it comes to natural gas production, the Marcellus Shale is setting new records.

Production in West Virginia and Pennsylvania, the two primary Marcellus states, reached an all-time high of 15 billion cubic feet of natural gas per day through July, according to the U.S. Energy Information Administration’s latest drilling activity report.

The Marcellus Shale provides 40 percent of the nation’s shale gas production, making it the country’s largest producing shale gas basin. Marcellus production has increased dramatically over the past four years, from 2 billion cubic feet per day in 2010 to its current level.

Production is expected to increase in the future, as there are only about 100 active rigs drilling in the Marcellus.

“With 100 rigs in operation and with each rig supporting more than 6 million cubic feet per day in new-well production each month, new Marcellus region wells coming online in August are expected to deliver over 600 million cubic feet per day of additional production,” information from the EIA states. “This production from new wells is more than enough to offset the anticipated drop in production that results from existing well decline rates, increasing the production rate by 247 million cubic feet per day.

One issue with the rapid growth in Marcellus production is that the region’s pipelines have reached capacity, the EIA states. This has led to multiple pipeline expansion projects focused on removing bottlenecks in the Marcellus region – a number of which can be found in the local area.

“As pipeline capacity is increased, markets in the northeast gain greater access to Marcellus region gas, which can result in stabilized or decreased prices,” the EIA said. “Natural gas prices in the northeast, such as the Dominion South trading point in southwestern Pennsylvania, have increasingly been below the Henry Hub price, in part because of increased access to Marcellus gas. Production in the Marcellus region surpassed winter demand for natural gas in Pennsylvania and West Virginia several years ago and is now on track to be enough to equal the demand in those states plus New York, New Jersey, Delaware, Maryland, and Virginia combined.”

The Henry Hub is a natural gas distribution hub in Louisiana. It lends its name to the pricing point for natural gas futures contracts traded on the New York Mercantile Exchange.

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