Residents flee, oil firms shut offshore production as Storm Francine intensifies
2024.09.10 12:59
By Gary McWilliams and Marianna Parraga
HOUSTON (Reuters) -Tropical Storm Francine was intensifying and on track to become a hurricane on Tuesday, the U.S. National Hurricane Center said, prompting Louisiana residents to flee inland and oil and gas producers to shut-in Gulf of Mexico production.
Francine could wallop the Louisiana coast on Wednesday with life-threatening winds, drenching rains and an up to 10-foot storm surge. Authorities called for a mandatory evacuation of residents in three coastal communities, schools were shut and officials distributed sandbags.
The storm is anticipated to be just offshore of the coasts of northeastern Mexico and southern Texas through Tuesday before making landfall near Cameron in Louisiana, in a major storm test for liquefied (LNG) export plants recently built in the region.
Energy companies began evacuating offshore workers and shut-in output at several production platforms ahead of the storm. The port of Brownsville near the border with Mexico and other smaller terminals in Texas remained closed on Tuesday, while others including Houston, Galveston, Corpus Christi, Texas City and Freeport were working with restrictions.
Between Texas and Louisiana, the ports of Beaumont, Port Arthur, Lake Charles, Cameron and Sabine imposed restrictions to vessel traffic, the Coast Guard said, while New Orleans, Baton Rouge and Houma began preparations to face the storm as it was expected to move from Texas to Louisiana.
The Coast Guard allowed the terminals to remain open on Tuesday morning, but restricted vessel navigation at some of them.
Ports in Mississippi and Alabama including Pascagoula also began preparations, but remained open on Tuesday.
Oil prices rose on Tuesday and natural gas prices fell, both on worries about the production shut-ins and potential impact on gas processing at LNG plants. The region is home to about 15% of U.S. oil production and 2% of natural gas output.
Energy pipeline operator Enbridge (NYSE:) pulled employees from several U.S. Gulf of Mexico platforms. Its Manta Ray Gas Gathering system declared force majeure at its Green Canyon 158 Brutus receipt point and stopped receiving natural gas, the company told customers.
Exxon Mobil (NYSE:), Shell (LON:) and Chevron (NYSE:) removed offshore staff and halted some oil and gas operations. Exxon cut production at its Hoover oil production facility about 150 miles east of Corpus Christi, Texas.
Chevron withdrew workers from four offshore facilities and halted oil and gas output at two. Shell cut production at one platform, moved workers off three facilities and paused drilling at two.
BP (NYSE:) ruled out any major impacts on its offshore facilities, while Woodside (OTC:) Energy and Occidental Petroleum (NYSE:) were prepared to take action as needed.
The storm is poised to become a major test for new LNG export plants in Louisiana. Sempra’s Cameron LNG, Venture Global LNG’s Calcasieu Pass LNG and Tellurian (NYSE:)’s Driftwood LNG development are in the crosshairs of Francine.
Natural gas flowing to the Cameron LNG export plant dropped on Tuesday to 1.3 billion cubic feet per day (bcfd) from about 2.2 bcfd on Monday, LSEG data showed. Officials at the company were not immediately available for comment.
Freeport LNG, which operates the nation’s second-largest export plant for the super-chilled gas, said it had begun storm preparations at its Texas plant without providing details.
