Louisiana shale gas sees a second life

HOUSTON — The surge in Gulf Coast petrochemicals and natural gas-fired power generation, combined with exports of natural gas, could push up Louisiana’s demand for the fuel and revive a voracious market for Haynesville and Marcellus shale gas, according to an ICF International report.

The Haynesville Shale, which lies on the Louisiana-Texas-Arkansas border, was considered one of the hottest shale plays in 2008. But by 2012, the collapse of natural gas prices led to an exodus of operators to other plays, in search of more oil-rich sites.

But growing use of natural gas for electricity generation and newly approved gas exports could revive demand for natural gas in Louisiana, according to consulting firm ICF International’s recent report.

The chief driver for the anticipated increase will be natural gas exports, and Louisiana has positioned itself well to capture new international customers, ICF International noted. Louisiana’s Sabine Pass export terminal is to date the only site to clear the needed permits to export natural gas, and its owner, Cheniere Energy, expects to start up the facility by 2015.

“Although project sponsors are backing LNG proposals on the East, West and Gulf coasts of the U.S. and Canada, Louisiana projects appear to have captured early market share,” ICF wrote.

Haynesville Shale: Chesapeake investing in natural gas play as prices rise

In turn, Louisiana’s ample supplies in the gas-rich Haynesville and other shale plays have made it an attractive proposition for the several other proposed terminals along the Gulf Coast. Louisiana has also has a maze of pipeline capacity and shipping infrastructure, as well as several brownfield sites that could more easily be permitted than a new location, ICF said in its report.

Growing natural gas generation in the Southeast is also expected to increase the demand for Louisiana’s natural gas production, with demand expected to grow by one trillion cubic feet a year throughout the next decade.


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