In its September Short Term Energy Outlook, the EIA said it expected marketed production to rise by 4 billion cubic feet per day (bcfd) to a record 65.8 bcfd, up from its previous estimate of a 3.68 bcfd increase.

Much of the growth in output will come from onshore production in the lower 48 US states, which will more than offset projected declines in offshore Gulf of Mexico output.

Gas production has been growing steadily since 2005, due to the boom in horizontal drilling in onshore shale formations.

Production in 2012 was expected to increase at a much slower pace, increasing by 1.1 bcfd to 66.9 bcfd.

Total domestic gas output this year should easily set an all-time high, eclipsing the 1973 record high of 62.05 bcf daily.

US natural gas consumption is expected to grow by 1.8 percent to 67.3 bcfd, in line with previous estimates, thanks to growth in the industrial and electric power sectors. Consumption in 2012 is seen rising 0.6 percent to 67.7 bcfd.

US imports of liquefied natural gas are expected to fall nearly 17 percent from 1.2 bcfd in 2010 to 1 bcfd in 2011 and 2012, as increased demand in quake-hit Japan boosts Asia LNG prices, the EIA said.

The forecast is unchanged from last month’s report.

EIA expects Henry Hub natural gas prices in 2011 to average $4.20 per mmBtu, down fours cents from its previous estimate and down 18 cents from last year’s estimated average of $4.38.

In 2012, the EIA sees prices rising 10 cents to $4.30 per mmBtu as production growth slows.