July 14–Natural-gas production from shale deposits in eastern Ohio is surging, helped by the increase in pipelines in the area that get the gas to markets, and by greater efficiency by producers.
Production from the Utica shale region jumped 43 percent from the first three months of 2018 from the same period of 2017, with production totaling 531.3 million cubic feet, according to Ohio Department of Natural Resources data released this week. The jump follows a 38 percent increase in production in the final three months of 2017.
The jump in production comes even as prices for natural gas remain low.
“There are more and more advances in technology and efficiencies,” said Jackie Stewart, state director of Energy In Depth, a research and education organization financed by the oil and gas industry. “That’s really the name of the game.”
At the same time, producers are learning more about the region and where the best resources are, Stewart said.
“There is some good data and core sampling,” she said. “There is a better handle of the geography.”
When the Utica was first being developed, the region didn’t have the pipeline capacity to handle the growing production. In the several years since, the pipeline system in the region has expanded as demand for gas has grown.
Power companies are depending more on gas to generate electricity, and more gas-fired power plants are being developed in the state to use that gas.
Last month, the Ohio Power Siting Board approved construction of a natural-gas plant in Cadiz in eastern Ohio. Construction by Harrison Power is expected to start in October, with operation to begin by June 2021. It is the 10th natural-gas power plant approved by the board in the past five years.
“Here in Ohio, (gas) producers can access multiple different markets,” said Matthew Hammond, executive vice president of the Ohio Oil and Gas Association.
In addition to the natural-gas power plants coming on board, producers anticipate more demand for gas from the Shell chemical plant being built in western Pennsylvania.
Also, Thai chemical company PTT Global Chemical is considering building a similar plant in Belmont County in eastern Ohio. Word on whether PTT and its South Korean partner, Daelim Industrial Co., will go ahead with the project is expected this year.
Those plants will depend more on natural-gas liquids being produced in the Utica.
“There are going to be huge end-users of the product,” Stewart said.
The growth in production in Ohio tracks a surge in production nationwide. It is expected to average 81.3 billion cubic feet a day in 2018, according to a U.S. government forecast this week. That would be a record. Production is expected to rise by 3.1 billion cubic feet a day next year.
Oil production in the Utica is a different story, though. It was down 3.6 percent in the first quarter from the same period in 2017, totaling 3.9 million barrels.
The region is best known for natural gas and natural-gas liquids, although there still is potential for oil production to grow, depending on how the technology continues to develop, Hammond said.
For now, Hammond said, he expects natural-gas production to continue to exceed 2017 levels through the rest of the year.
“Rig counts are relatively steady,” he said. “More wells are being drilled. Production continues to grow.”
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