News / Business
Natural Gas Prices Will Likely Become Impacted More by Well Freeze-Offs
As the below-normal temperatures of January have passed, so too have well freeze-offs. However, freeze-offs are likely to become more common in future years because of shale production growth.
The bitter cold weather in January brought with it well freeze-offs, a term that may be new to many. Well freeze-offs occur when colder temperatures lead to an inability to produce the gas because of equipment failures, well failures or pipeline failures. Most gas wells produce some small amounts of water, and this water must be removed before the gas can be processed for injection into the interstate pipeline system. If the weather is too cold, the water vapor can form ice hydrates, blocking natural gas production. This can result in what is deemed a well freeze-off.
“Well freeze-offs are typically confined to areas that aren’t used to the cold weather, such as Louisiana and Texas. Conversely, production regions like Canada include special systems to prevent ice hydrates from forming,” says Valerie Wood, President of Energy Solutions, Inc. “With more production moving on-shore to prolific shale regions, well freeze-offs are probably going to be something that we hear more of in upcoming years. What we may see is that natural gas prices respond less to hurricane threats because there is now less production in the Gulf of Mexico, but more to colder weather forecasts in the south because of the threat of well freeze-offs.”
Learn more about where natural gas prices may move in 2010 in the February edition The Advisor, a newsletter specifically written for businesses as an educational tool and guide about the natural gas industry and price trends. Receive the February edition, as well as a full month of valuable natural gas pricing insight, by taking a free no-strings attached trial to The Advisor for 30 days. Or simply request a complimentary copy of the most recent monthly edition by sending an e-mail to request-pr@energysolutionsinc.com or call (608) 848-9589.
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About Energy Solutions, Inc.
Formed in 1996, Energy Solutions, Inc. is independently owned. With more than 25 years of experience in the natural gas industry, our team focuses on natural gas prices and in helping businesses improve their internal processes for the purchase of natural gas.
