EIA: New Gulf of Mexico projects expected to reverse gas production declines
Category : News
WASHINGTON, D.C. — Natural gas production in the U.S. Federal Gulf of Mexico (GOM) has been declining for almost two decades. EIA expects nine new natural gas production projects to start in 2018 and another seven to start in 2019. These 16 projects have a combined estimated natural gas resource of about 800 Bcf and may reverse some of the declines in GOM production.
The GOM marketed natural gas production has been mostly declining on an annual basis since 1997, when EIA first recorded this data. In 1997, production stood at 14.3 Bcfd, accounting for 26% of the United States’ total annual marketed natural gas production. By 2017, natural gas production in GOM declined to 2.9 Bcfd and accounted for only 4% of the total U.S. annual marketed production.
This decline occurred for several reasons. The number of producing natural gas wells in the GOM declined by 73% between 2001 and 2017—from 3,271 to 875. The technology and expertise required to produce oil and natural gas from the seabed is expensive and specialized, and costs of production platforms often exceed a billion dollars. With the growth in exploration and production activities in shale gas and tight oil formations, it became more economic to drill onshore in these basins.
In addition, most of the natural gas produced in the GOM is associated-dissolved (AD) natural gas produced from oil fields, and although older oil wells in the GOM tend to have higher natural gas content, newer wells are more oil-rich, resulting in less AD natural gas per well. According EIA’s Natural Gas Annual, 59% of gross withdrawals of natural gas in the GOM were from oil wells in 2017. In 1997, however, only 13% of gross withdrawals were of AD gas co-produced with oil.
In 2016, all new projects in the GOM occurred in the Mississippi Canyon and Green Canyon protraction areas, located in the Central GOM planning area, and had an average depth of 4,283 ft and total resource level of 1,429 Bcf. Based on the data provided to the Bureau of Safety and Environmental Enforcement, no new GOM projects started up in 2017. For 2018-2019, nine of the 16 projects are located in Mississippi Canyon and Green Canyon protraction areas. Three projects in Garden Banks, West Cameron, and Keathley Canyon are also part of the Central GOM planning area. Two of the projects in Viosca Knoll and Desoto Canyon are in the Eastern GOM planning area. Alaminos Canyon and Sigsbee Escarpment are in the Western GOM planning area. Average project depth is expected to be 4,544 ft in 2018 and 5,585 ft in 2019.