Some western U.S. natgas wells freeze, up to 1 bcfd affected

Wed Jan 16, 2013 2:28pm EST

* Cold snap blamed for lost production

* Most losses seen in San Juan Basin

By Eileen Houlihan

NEW YORK, Jan 16 (Reuters) - Cold weather in the western United States over the past several weeks has disrupted natural gas production, curbing supplies after water in wells froze, energy traders and analysts said on Wednesday.

"The colder weather moved into the West in late December and we have started to see a production drop off in January from December across the West," said Ryan Smith, energy analyst with Bentek Energy in Colorado.

"The San Juan Basin is where we're seeing the largest drop in production from freeze-offs, there's about 330 million cubic feet offline compared to December's average production," Smith said.

Smith said the San Juan Basin, which stretches across southern Colorado and northern New Mexico, is especially susceptible to freeze-offs due to the water production in those areas.

Freezing temperatures cause production losses when cold temperatures crystallize the small amounts of water produced with natural gas, forcing blockages at the wellhead and often resulting in low linepack on connecting natural gas pipeline systems.

Kinder Morgan's 10,200-mile El Paso Natural Gas pipeline system said in a website posting this week that supply "underperformance" existed in the San Juan Basin and to a lesser degree in the Permian Basin as a result of the cold weather.

The Permian Basin lies mainly in northern Texas. Freezing cold overnight temperatures across much of the Southwest and West this week were only warming to zero degrees Fahrenheit or the mid-teens F on Wednesday, according to the Weather Channel's weather.com.

"We're seeing losses across the western basins like the Green River, Piceance and the Uinta. Those three basins all have liquids production associated with them so they are more susceptible to the freeze-offs as well," Bentek's Smith said.

Randall Collum, managing director of supply side analytics for Genscape in Houston agrees, noting their data showed about 350 mmcf off line in the San Juan Basin and about 500 to 600 mmcf a day overall in the Rockies. "We're talking close to 1 bcf per day of shut in production due to freeze-offs," Collum said.

Collum said most of it could be back within a couple of weeks, depending on how fast it warms up and snow in those areas.

"If they can't get to wells to turn them back on line, I've seen some production stay off as late as June, in small numbers, but it could happen if it stays cold in some areas like Wyoming and Utah," Collum said.

More seasonal temperatures were expected for Thursday, but if overnight cold conditions remain, low linepack could continue the El Paso posting said.

Northern Natural Gas which operates a 14,900-mile pipeline system that extends from the Permian Basin in Texas to the upper Midwest issued an operational flow order on Wednesday, according to a website posting.

Operational flow orders, or OFOs, protect the integrity of a pipeline by requiring shippers to balance their supply with customers' usage, typically within a specified tolerance band.

A mild winter last year did not stir talk of any production cuts from wells freezing, but in early 2011, about 7 billion cubic feet of production was lost during a cold spell in the Southwest. The disruption rivaled a production loss from a major hurricane hitting the Gulf of Mexico, the U.S. Energy Information Administration said.

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