Data source: Enverus, based on state administrative data

Dry natural gas production from the Haynesville shale play in northeastern Texas and northwestern Louisiana reached new highs in February 2023, averaging 14.4 billion cubic feet per day (Bcf/d), 9% more than the annual 2022 average of 13.2 Bcf/d, according to Enverus. Haynesville natural gas production in February accounted for about 14% of all U.S. dry natural gas production.

The Haynesville is the third-largest shale gas-producing play in the United States, behind the Permian play in Texas and New Mexico, and the Marcellus play in the Appalachian Basin. In 2022, dry natural gas production averaged 25.2 Bcf/d from the Marcellus (83% of Appalachian Basin production), and 15.4 Bcf/d from the Permian play. Altogether, the Marcellus, the Permian, and the Haynesville account for 55% of U.S. dry natural gas production.

Natural gas production in Haynesville increased in 2022, from an average of 12.4 Bcf/d in January to 14.1 Bcf/d in December. Natural gas prices rose relatively steadily throughout most of 2022 as well. The U.S. benchmark Henry Hub reached a monthly high for the year in August at $8.81 per million British thermal units (MMBtu). The Henry Hub price declined in the second half of 2022 to an average $5.53/MMBtu in December but was 26% higher than at the start of the year. Drilling costs in Haynesville tend to be higher because natural gas wells in the play are deeper than in other plays. As natural gas prices rose in 2022, economics for developing new wells in Haynesville improved, which led some producers to add more rigs in the play and increase production.

The rise in active natural gas-directed rigs in Haynesville in 2022, as reported by Baker Hughes, followed rising natural gas prices. In Haynesville, an average of 65 rigs were in operation in 2022, which was 43% more than the average number of active rigs in 2021. In the first three months of 2023, as natural gas prices fell, the number of active rigs in Haynesville plateaued at about 68 rigs.

Pipeline takeaway capacity out of Haynesville is currently estimated to be around 16 Bcf/d, according to S&P Global Commodity Insights. The Enterprise Products Partners’ Gillis Lateral pipeline and the associated expansion of the Acadian Haynesville Extension, which move natural gas from the Haynesville to demand centers and liquefied natural gas terminals along the U.S. Gulf Coast, were the most recent pipeline projects to enter service (December 2021) in the area.

In addition, three new pipeline projects that would add 5.0 Bcf/d of takeaway capacity out of Haynesville by the end of 2024 include:

Williams’ Louisiana Energy Gateway (1.8 Bcf/d)

Momentum Midstream’s New Generation Gas Gathering (NG3) (1.7 Bcf/d)

TC Energy’s Gillis Access project (1.5 Bcf/d)