Jan 20, 2022
Cold Sends Texas Natural Gas Supplies Plunging for Second Time This Month
(Bloomberg) -- For the second time this month, Texas natural gas supplies have dropped along with temperatures in the state’s biggest gas fields.
Dry gas production on Thursday was down by nearly 7%, according to preliminary BloombergNEF data based on pipeline flows. That’s the biggest decline since Jan. 2, when a similar blast of frigid air also curbed supplies.
“It’s a safe assumption to call freeze-offs,” BloomberNEF analyst Jade Patterson said, adding that figures may still be adjusted throughout the day.
READ: Texas Braces for Cold, Sleet and a Test for the Power Grid
The cold sweeping Texas threatens to send temperatures below freezing across much of the state, with oil and gas fields in West Texas facing low temperatures in the teens and 20s through Saturday, according to the National Weather Service. Houston, the center of the state’s petrochemical industry, could reach 32 degrees Fahrenheit (0 Celsius) Friday night.
Data from analytics firm RBN Energy Thursday shows a 4.4% drop in production from the Permian basin alone. So far, the output declines appear to be somewhat offset by a jump in withdrawals from gas storage on the Gulf Coast, according to BloombergNEF figures.
READ: Texas Power Supplies Depend on Natural Gas Flows No One Tracks
The dip in production has so far had limited impact on both gas and power prices. While peak electricity demand on the state grid Thursday night is expected to be higher than forecast for this winter, it will still fall well below the record set during the crisis of last February, when millions lost power for days.
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