UPDATE 1-EIA sees U.S. 2016 natgas production, consumption at record highs

(Adds details on production, demand, coal and LNG)
March 8 (Reuters) - U.S. natural gas production in 2016 was
expected to reach a record high of 79.68 billion cubic feet per
day, down a shade from the 79.69 bcfd forecast last month, the
U.S. Energy Information Administration said on Tuesday
The forecast would top 2015's all-time peak production of
79.13 bcfd and would be the sixth consecutive annual record high
for U.S. gas production, according to the EIA's Short Term
Energy Outlook (STEO) in March.
The EIA also forecast U.S. gas consumption would edge up to
76.79 bcfd in 2016 versus the 76.44 bcfd it forecast in
February, due to increasing expectations of gas use by the
electric power sector.
That would top the 2015 record high for gas demand of 75.38
bcfd and would be the seventh annual record high in a row.
For 2017, the agency forecast more record highs with
production expected to rise to 81.36 bcfd and consumption
growing to 77.31 bcfd.
In addition to power sector demand, the EIA also said gas
consumption in 2016 and 2017 would rise as new fertilizer and
chemicals projects that use gas as a feedstock come online.
The EIA forecast the growth of gas production in 2016 would
slow to 0.9 percent from 5.4 percent in 2015 as low gas prices
and declining rig activity begin to affect production. In 2017,
however EIA expects production to grow by 2.1 percent as
forecast gas prices rise, industrial demand grows and liquefied
natural gas (LNG) exports increase.
That production growth will reduce demand for gas imports
from Canada and support increasing exports to Mexico, the EIA
said.
EIA projects LNG gross exports will increase to 0.5 billion
cubic feet per day in 2016 with the startup of Cheniere Energy
Inc's LNG.A Sabine Pass LNG export terminal in Louisiana in
February, and average 1.3 bcfd in 2017 as Sabine Pass ramps up
its capacity.
Separately, EIA forecast coal production would decrease by
111 million short tons (101 million tonnes), or 12 percent, in
2016, the biggest annual percentage decline since 1958. In 2017,
EIA expects coal production to stabilize, increasing by 16
million tons, or 2 percent.
EIA estimated the delivered coal prices would average $2.18
per million British thermal units in 2016 and $2.20 in 2017,
compared with $2.23 in 2015.
That compares with gas prices at the Henry Hub benchmark in
Louisiana of $2.61 per mmBtu in 2015 and forecasts for $2.25 in
2016 and $3.02 in 2017.