Tropical Storm Francine Disrupts Gulf Coast Oil, Gas Output

Tropical Storm Francine is set to become a hurricane Tuesday as it churns toward Louisiana, forcing some oil drillers to halt production and evacuate crews in the Gulf of Mexico.

Strong winds and a dangerous storm surge are expected along the region’s shoreline, the National Hurricane Center said in an advisory issued at 4 a.m. in Houston. Francine is “anticipated to be just offshore of the coasts of northeastern Mexico and southern Texas through today, and make landfall in Louisiana on Wednesday,” the center said.

The system, located 415 miles (665 kilometers) south-southwest of Cameron, Louisiana, saw winds accelerate to 65 miles per hour. They are forecast to reach 100 miles per hour eventually, which would make Francine a Category 2 hurricane.

A hurricane warning is in effect for the Louisiana coast from Sabine Pass to Morgan City. Storm surge warnings are in place from High Island, Texas, near Houston, to the mouth of the Mississippi River.

Chevron Corp., Exxon Mobil Corp. and Shell Plc are among companies taking measures like evacuating workers from vulnerable installations, suspending drilling activities, and shutting in some wells. The storm’s forecast path intersects with fields that account for roughly 125,000 barrels of crude and 300 million cubic feet of natural gas on a daily basis, according to Bloomberg calculations using government data.

Gas supply to Cameron LNG also fell about 41% from the previous day, according to data compiled by BloombergNEF.

On its expected track, Francine may rake nine major platforms, including Enchilada, Cerveza, Perdido and Hoover. That said, the storm probably won’t have a large impact on overall energy production, Chuck Watson, a disaster modeler with Enki Research, said in a social media post.

Meanwhile, the US Coast Guard declared Port Condition X-Ray at Houston, Galveston and other key Texas harbors, a warning that rough weather is expected within 48 hours. One upside to Francine as it moves ashore is that it will bring much needed water to the parched Mississippi River, temporarily raising the fortune of shippers before dry conditions set in again.

This will be the third storm to hit the US mainland this year. As Francine nears the coastline, it could encounter cross winds, or wind shear, that would threaten to weaken it.

The hurricane center is tracking two other disturbances in the central Atlantic Ocean with the potential to become tropical storms. Both are hundreds of miles or more from populated areas.