Wood Mackenzie reports historic natural gas freeze-offs as arctic weather drives production losses to near-record levels

Current freeze-off and cold weather impacts are estimated at approximately 13.5 billion ft³/d, with Lower 48 production at approximately 95.8 billion ft³/d. The cumulative freeze-off for the 2025 - 2026 winter season has now reached 58.3 billion ft³.

"Freeze-off estimates for January 25 were revised upward, with North Louisiana estimates increasing by approximately 3 billion ft³/d as temperatures at Shreveport reached a high of only 28°F and a low of 21°F following hailing conditions on January 24," said Randall Collum Jr., P.E., Senior Vice President at Wood Mackenzie. "In response, pipe nominations were adjusted downward across nearly all pipelines, most notably with NG3 seeing a reduction of approximately 585 million ft³/d and Tiger pipeline declining by approximately 365 million ft³/d. Additionally, Gulf Run, Tiger and TETCO issued underperformance notices at several points for gas day January 25, further reflecting the operational challenges stemming from the severe weather conditions."

The freeze-offs have contributed to a historic jump in natural gas prices, driven by a dramatic shift in weather forecasts and the unique characteristics of this cold weather event.

"This cold weather event differs significantly from last year," explained Eric McGuire, Director of Research – Commodities, Trading, & Data Analytics at Wood Mackenzie. "This cold event is much more intense and shorter-lived. The cold is also reaching much further south than we normally see in the US. This has resulted in large freeze-offs and intense spikes in demand, particularly in the south where Henry Hub—the futures price for natural gas—is located. We are seeing freeze-offs reach just over our forecast of 16 billion ft³ and just shy of the Winter Storm Uri high."

McGuire noted that the price surge also reflects broader market dynamics: "Coming into January, temperatures were looking significantly warmer than normal and production levels were strong. As a result, prices had dropped approximately US$2 from their December highs. In the period of a single week, the entire outlook flipped due to changes in the weather forecast. On top of freeze-offs, the US currently faces large 'deliverability' issues in Q1. While we theoretically have enough gas in underground storage to meet these supply shortfalls, these shortfalls can exceed what the market can withdraw from storage in a single day in some regions. This helps explain why prices have risen so much in the February contract, since February still has moderate risks of cold fronts coming through."

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/27012026/wood-mackenzie-reports-historic-natural-gas-freeze-offs-as-arctic-weather-drives-production-losses-to-near-record-levels/