Appalachian natural gas production increases depend on pipelines, infrastructure
Thursday, January 6, 2022
Natural gas production from the Marcellus and Utica shale plays is anticipated to eclipse 42 billion cubic feet per day (bcfd) by 2025, according to GlobalData. However, this estimate is dependent on prices staying above $3.5 per one million British thermal units (mmbtu) and pipeline projects being completed as planned.
It appears the approval process in the Appalachian Basin has been stricter and more exhausting for pipeline operators, as both the PennEast and Atlantic Coast pipeline projects were canceled on environmental grounds, suggesting it is going to be challenging for any major pipelines in the future to get approval.
The Appalachian Basin has the potential to increase production to 47 bcfd by 2030, but pipeline and infrastructure limitations put the region at risk of having to curtail production.
No new pipelines are expected to come online after 2023. At that point, the current pipeline infrastructure and the 11 pipelines planned to be built in Pennsylvania, Ohio and West Virginia by 2023 will be able to support only 41 bcfd of natural gas flowing capacity.
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Shale FAQ
How often do royalty payments come?
Depending on the company, royalty payments can arrive monthly or quarterly.
Are my royalty payments transferable?
Yes. If you plan on selling your property, notify the gas company that is leasing your land and your realtor. They will make arrangements to allow the royalty payments to transfer to a different land owner.
What are royalties?
Royalties are payments from the gas company to the landowner as part of a lease agreement. Royalties payments cannot begin until production begins. The payments are dependent upon the market price of the resource.