June 11, 2013 / 5:29 PM / in 4 years

UPDATE 1-EIA raises U.S. natgas production estimate for 2013

* EIA sees 2013 gas output at record-high 70.01 bcfd

* 2013 gas demand seen up 0.36 bcfd (0.5 pct) from 2012

NEW YORK, June 11 (Reuters) - The U.S. Energy Information Administration on Tuesday raised its estimate for domestic natural gas production in 2013, saying it expected output this year to be up about 1.2 percent from 2012’s record-high levels.

In its June Short-Term Energy Outlook, the EIA said it expected marketed natural gas production in 2013 to rise by 0.83 billion cubic feet per day to a record 70.01 bcf per day, up from its May outlook of 69.9 bcf daily.

If the forecast is realized, it would be the third straight year of record production.

Domestic output in 2014 is expected to set another record high, up 0.37 bcf daily to 70.38 bcf per day.

The agency said it expects onshore production increases to continue to offset declines in Federal Gulf of Mexico output.

Natural gas pipeline imports, primarily from Canada and which have fallen over the last five years, are projected to remain near 2012 levels at just over 8 bcf per day.

Imports of liquefied natural gas (LNG) are expected to remain at minimal levels of around 0.4 bcf per day in both 2013 and 2014, EIA said.

EIA slightly lowered its estimate for 2013 consumption, but still sees usage climbing by 0.36 bcfd, or 0.5 percent, from 2012 to 70.04 bcf daily.

It was the second straight month that the agency lowered its estimate for consumption this year as rising gas prices contribute to declines in gas used to generate electricity.

However, a colder winter this year and in 2014 compared with record-warm temperatures in 2012 are expected to increase gas used for residential and commercial space heating.

In 2014, EIA sees total gas use slipping 0.45 bcf per day, or 0.6 percent, to 69.59 bcf daily, as higher gas prices curb demand from the power sector.

EIA forecast Henry Hub natural gas prices in 2013 to average $3.92 per million British thermal units, up 12 cents from its May estimate of $3.80 and 43 percent above 2012’s estimated average of $2.75.

In 2014, EIA expects gas prices to rise 18 cents, or 4.6 percent, to $4.10 per mmBtu.

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