Freeze-offs were becoming a very real threat to production Thursday as nearly all of the United States and Canada was experiencing lows in the 30s or below — often much below — that are expected to last into early next week in most cases. Abetted by a 37.2-cent futures gain a day earlier, most of the cash market responded to the onslaught of frigid weather with price spikes that exceeded a dollar in several cases, particularly in the Gulf Coast and Midcontinent.

A large majority of points recorded gains from a nickel or so to about $1.45. Forecasts of snow and a 20-degree low Friday in New York City spurred rebounds in both of Transco’s Zone 6 pools and at Texas Eastern M-3. But despite a similar low around 20 due in Boston, New England citygates continued their slide from the previous two days. Losses, all confined to the Northeast, ranged from about a nickel to the $1.45 area.

A number of new OFOs or other cold-related pipeline restrictions, at least one of which mentioned the potential for wellhead freeze-offs cutting into linepack, were being added to earlier ones (see Transportation Notes).

The Energy Information Administration barely exceeded consensus estimates centered around 150 Bcf when it reported a 153 Bcf storage pull for the week ending Jan. 1. Nymex traders took a rather dim view of the report, though, and pushed February futures 20.3 cents lower (see related story).

There was no shortage of heating load for Friday. Chicago was predicted to see snow and a low around 4, while Des Moines, IA, was expected to peak at zero and bottom out at 15 below zero. Sub-freezing lows were expected in almost all regions other than the West Coast and desert Southwest.

Tudor, Pickering, Holt analyst Dave Pursell in a Thursday morning advisory noted that the last time the industry has had “really cold weather” was in late January and early February of 2007, concentrated in the Rockies and Midcontinent. Energy Information Administration-914 data showed about 1.5 Bcf/d of production impact during those two months in Wyoming, Oklahoma and other states, which over the two-month period translated into roughly 90 Bcf of total impact, Pursell said. “The current cold wave could have a larger impact as the breadth of the cold will impact Texas and Louisiana that combined produce over [one-third] of U.S. gas production,” he added.

“So if you want to get really bulled-up, you could see a U.S. gas picture where weather is 10% colder than normal, wellhead freeze-offs hit 75-125 Bcf and inventory ends withdrawal season under 1,200 Bcf.”

Pursell noted that not all production operations are designed for cold weather. “In cold weather climes this is not as big an issue as problem wells are often fitted with a methanol-injection system (or heating/insulation) to help prevent wells from freezing off. No so much in Texas and Louisiana,” he said.

A Rockies producer confirmed that despite the normally colder conditions in his region than in others, freeze-offs are not all that common because “they [producers] have equipment to deal with this problem.” Also, temperatures must stay near zero over the course of several days for Rockies freeze-offs to occur in most instances, he added.

But producers in the eastern half of Texas, Louisiana and Arkansas generally are not used to such harsh weather and few if any have freeze-prevention facilities on their wellheads, he went on. The producer said he had heard of some freeze-offs in San Juan Basin this week; he was not aware of any in Wyoming (where his company’s operations are concentrated) since last month, but said they possibly they could be happening elsewhere in the Rockies.

Given the pipeline’s spotty past record on meeting projected deadlines, the producer said he would “give 50-50 odds” on Rockies Express restoring service this month at five delivery points near its Ohio terminus (see Transportation Notes).

He said he would bet that “a lot of producers are hedging into this rally. It’s the best price-boosting weather we’ve had in quite a while.”

The woes associated with freezing weather extended into the South. NGPL said it had reduced capacity at the Chesapeake Little Creek receipt point in Arkansas, citing “reported freeze-offs.” And Monroe Gas Storage was not providing interruptible withdrawals at its facility in Mississippi and was limiting firm withdrawals “because of operational freeze-offs.”

Also related to the freezing weather in Texas and the Gulf Coast in general, the Moss Bluff storage facility east of Houston in Liberty, TX, had sealed withdrawals for Friday, according to a late Thursday afternoon report by Reuters. Spokespersons for Moss Bluff owner and operator Spectra Energy could not be reached for confirmation.

The National Weather Service had hard freeze warnings in effect from the southwestern corner of Arkansas through a broad swath along the eastern border of Texas, in much of central Louisiana and in southern Mississippi and Alabama.

Bentek Energy analyst Rocco Canonica said his company estimated 1-1.5 Bcf/d being shut in nationwide due to freeze-offs. There were “symptoms” of a lot of freeze-related Gulf Coast outages in pipeline bulletin board postings for that region, he added.

Yes, there were major production shortfalls due to frozen equipment, Canonica said, “but that will eventually end.” Plenty of gas is still left in storage, which will limit the impact of temporary cuts in supply related to freeze-offs, he said.

A western marketer said despite other freeze-off reports, his company had not seen any cuts in San Juan Basin supplies since Sunday. The company was getting premium prices for its firm-service gas out of Monroe Gas Storage due to the freeze-related curtailments, he said.

A West Coast buyer also reported having “no problems yet” with San Juan supplies. However, despite relatively moderate conditions in much of Northern California, he suspected that PG&E citygate and Malin upticks of about a quarter were due to a lot of gas going off-system and heading east for higher-demand markets, which spurred a low-inventory OFO by the utility.

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