Recent gas market changes parallel US need for more LNG ///

Gas demand considerations virtually mandate an escalation in LNG usage by the US. Yet, a build-up in LNG infrastructure has its own problems, and US policymakers must keep a careful watch on the effect this may have on traditional gas production. Total US natural gas demand in 2006 is projected to remain near 2005 levels, and then increase by 2.3% in 2007. Residential demand, in particular, is projected to slip somewhat during 2006 from 2005 levels, and then increase 3.3% in 2007. Natural gas demand for generating electricity is expected to fall 2.1% in 2006 because of the warm January, and the assumed return to normal summer weather, then increase 2.2% in 2007. However, strong growth in natural gas-intensive industrial output is expected both this year (3.1%) and next year (2.2%). Domestic dry gas output in 2005 is estimated to have declined 2.7%, owing mainly to hurricane-induced infrastructure disruptions in the Gulf of Mexico.

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