(Adds LNG, 2011 supply, demand and price outlook)
NEW YORK, March 9 (Reuters) - The U.S. Energy Information Administration on Tuesday slightly lowered its estimate for domestic natural gas production in 2010, expecting output this year to be down 2.7 percent from 2009 levels.
In its March Short-Term Energy Outlook, EIA said it expected marketed natural gas production to be down 1.64 billion cubic feet per day, or 2.7 percent, this year, primarily due to the impact of lower drilling activity last year and steep decline rates associated with newly drilled wells.
In 2011, EIA expects marketed gas production to climb 1.1 percent to 59.34 bcf per day as continued drilling rig activity, increasing drilling efficiency and potential higher shale gas production lift overall output.
EIA also said it expects U.S. liquefied gas imports to rise 45 percent in 2010 to 1.8 bcf daily, as more LNG supply comes on line. But as global demand for LNG rises next year, EIA expects little year-over-year import growth in 2011.
EIA also forecast U.S. natural gas consumption this year would average about 62.93 bcf per day, up 0.7 percent from 2009 demand of 62.48 bcf daily, backed by a cold winter this year, particularly in the Southeast, that drove strong usage from the residential, commercial and electric power sectors.
EIA said the small 0.4 percent decline expected in consumption next year reflects the return to near-normal weather, but continued economic recovery should lead to a 2.1 percent gain in industrial gas use.
EIA also expects Henry Hub natural gas prices this year to rise 27 percent from 2009 to about $5.17 per million British thermal units, down 20 cents from its previous monthly estimate of $5.37. EIA said the potential for higher production, increased imports of LNG and limited consumption growth could make it difficult to sustain high prices this year.
EIA expects Henry Hub prices to climb another 9.3 percent in 2011 to $5.65. (Reporting by Joe Silha; editing by Julie Ingwersen)