HOUSTON, Sept 9 (Askume) – Offshore oil and gas producers in the Gulf of Mexico evacuated workers and halted drilling on Monday as Tropical Storm Francine swept across the south-central United States, bringing strong winds.
Francine is heading toward the US Gulf of Mexico and is expected to become the fourth hurricane of the Atlantic season, which ends on Nov. 30. The National Hurricane Center said Francine could become a Category 1 hurricane with winds of 85 mph (137 kph) before it reaches the Louisiana coast on Wednesday night.
Life-threatening storm surge is expected along the upper Texas and Louisiana coasts this week, with hurricane force likely in southern Louisiana. New Orleans and other communities have begun providing sandbags to residents to protect them from flooding. Grand Island, at the tip of the Louisiana coast, called on residents to voluntarily evacuate and canceled school classes for Tuesday.
US oil and gas production facilities and coastal liquefied natural gas (LNG) export plants are at risk from the hurricane’s path. Coastal Louisiana could see a storm surge of 5 to 10 feet (1.5 to 3 meters), the NHC said.
US federal offshore waters in the Gulf of Mexico contribute approximately 15% of US crude oil production and 2% of natural gas production.
US crude oil prices rose 1.5% on Monday, having hit a multi-month low last week on concerns that the storm could disrupt production and refining on the Gulf Coast.
U.S. natural gas futures fell nearly 5% on concerns that Francine could reduce demand by reducing flow to Gulf Coast liquefied natural gas export plants and disrupting power supplies to homes and businesses.
Offshore and onshore impacts
ExxonMobil (XOM.N) said it had halted production and evacuated workers from its Hoover offshore production platform, about 150 miles (241 kilometers) east of Corpus Christi, Texas.
Shell (SHEL.L) said it was cutting redundant staff at three offshore oil platforms and halting drilling at two others.
A Chevron Corp (CVX.N) spokesman said the company was furloughing non-essential workers at four offshore platforms but was maintaining production at normal levels.
BP said it did not expect a major impact on its Gulf facilities .
Occidental Petroleum Corp (OXY.N) and Woodside Energy Corp (WDS.AX) said they are prepared to implement hurricane plans as appropriate.
Freeport LNG, which operates the second-largest ultra-cooled natural gas export plant in the United States, said its plant in Texas had begun preparing for the storm but did not give details.
Cheniere Energy (LNG.N) did not immediately comment on its Sabine Pass LNG facility. Sempra (SRE.N) and Venture Global LNG did not respond to requests for comment on their Louisiana liquefaction plants.
The National Hurricane Center said heavy rain and flooding was at risk from far northeastern Mexico to ports along the Texas coast, southern Louisiana and southern Mississippi.
The US Coast Guard has banned ships from entering some Texas ports, including Brownsville, Corpus Christi and Freeport, which handle oil imports and exports.
The ports of Houston and Galveston in Texas and New Orleans in Louisiana opened to ship traffic on Monday. The Louisiana Deepwater Offshore Oil Port (LOOP) is operating normally.
Texas officials have asked residents to prepare for potential flooding and heavy rainfall. Texas Power Grid said local power outages could occur if the storm hits the state.
In July, Hurricane Berry killed eight people and left more than 2 million Texas customers without power for days. The outages strained the energy infrastructure, knocking out power to hundreds of gas stations.
