US Gulf Coast producers shut in oil output ahead of Tropical Storm Francine

US Gulf Coast drillers were shutting in oil and gas production, and ports were starting to close Sept. 10 in preparation for Tropical Storm Francine's landfall.

Upstream producers had shut in 412,070 b/d of oil production, or around 23.55% of the US Gulf's total crude output of 1.85 million b/d, and also 494,000 Mcf/d, or about 25.56% of the Gulf's total gas production of 1.9 Bcf/d, according to the US Bureau of Safety and Enforcement, using US Energy Information Administration figures.

At the same time, 130 US Gulf platforms have been evacuated, which account for 35% of total platforms in the region, BSEE said.

Shell was in the process of shutting in its Perdido hub after it "safely paused" drilling operations at Perdido and at Whale, a new production hub that is still under construction but slated to begin operating later in 2024, Shell said in a statement late Sept. 9.

Shell also evacuated non-essential crews as a precaution at its Enchilada/Salsa and Auger assets located further east of the storm's track through the southwest US Gulf.

Chevron initiated shut-in procedures for its Anchor and Tahiti platforms and started transporting all crew to shore, said spokeswoman Paula Beasley. Non-essential crews were being transported from Chevron's Big Foot and Jack/St. Malo platforms. All other Chevron-operated facilities in the Gulf of Mexico continued at normal levels.

"At our onshore facilities, we are following our storm preparedness procedures and paying close attention to the forecast and track of the storm," Beasley said. "Chevron will continue to closely monitor Tropical Storm Francine and remain focused on the safety of our workforce, the integrity of our facilities and the protection of the environment."

ExxonMobil evacuated all staff from its Hoover offshore platform, and operations have been shut in, spokeswoman Michelle Gray said.

Francine was still offshore the Mexican coast at 10 am CT (1500 GMT) Sept. 10. The storm is expected to make landfall as a hurricane somewhere on Louisiana's central-to-east coast late Sept. 11, according to the US National Hurricane Center.

At 10 am CT, the storm was moving north-northeast across the Western US Gulf at around eight miles per hour, the NHC said. It was located about 120 miles southeast of the mouth of the Rio Grande River and about 425 miles southwest of Morgan City, Louisiana.

Port closures

Multiple ports in the Corpus Christi sector already shut as the storm approached the southeast Texas coast with windspeeds upwards of around 40 miles, according to the NHS.

The Port of Brownsville, along with three smaller ports in Corpus Christi, suspended all vessel traffic in the area as early as Sept. 9 according to the US Coast Guard, in anticipation of heavy rainfall and flash and urban flooding.

Remaining ports at Port Arthur and the Port of Houston, which are further along the path of the storm, remain open but are closed to inbound vessel traffic. Freeport, Houston and Texas City ports remain fully open, the USCG reported.

The Port of New Orleans has also implemented vessel traffic control measures but is still allowing vessels to enter and depart the port.

The Louisiana Offshore Oil Port also remained open, a spokesperson told S&P Global Commodity Insights Sept. 10, as the port is not expected to see any impact yet from the storm. LOOP continues to monitor the storm as its expected to reach the area by Sept. 11.

Up to 5.8 million b/d of refining capacity in storm path

With hurricane and tropical storm warnings and watches blanketing much of the region from New Orleans west to Beaumont, Texas, as much as of 5.8 million b/d of capacity could be at risk from the storm.

Currently, the three plants in Calcasieu Parish, Louisiana are most at risk, with a combined refining capacity of about 854,500 b/d, roughly one-third of Louisiana's coastal capacity.

Calcasieu Refining shut down its 135,500 b/d plant in Lake Charles, Louisiana, on Sept. 9, according to a company spokesperson, reducing the parish’s operating refinery capacity to 719,000 b/d.

At Citgo’s 455,000 b/d Lake Charles refinery, the company said in a Sept. 10 statement it is “implementing its Hurricane Preparedness Plan and adjusting operations as required.”

Concerns about power outages due to impact of high winds on the grid remain. Major power provider Entergy said it was putting on additional crews ahead of the storm.

“The electric companies have strengthened the power grid after Laura. There are going to be normal outages because of high winds but we don’t expect large areas of outages in Calcasieu at this time,” said Jared Maze, head of Calcasieu Parish’s office of Homeland Security in a meeting with parish residents on Sept. 10.

Hurricane Laura hit Louisiana as a Category 4 storm in 2020, impacting power infrastructure and refinery operations.

Shell, which operates a 233,702 b/d refinery in Norco, Louisiana, said in a statement that “only those personnel preparing for landfall and those operating the facilities will report to work on Wednesday, September 11, 2024.”

The NWS said rainfall could be a factor for some further inland Louisiana refineries, including Marathon's 596,000 b/d Garyville, Louisiana, plant, located in St. John the Baptist Parish, where a storm surge watch and tropical storm watch are in effect.

"We have comprehensive plans and procedures in place to protect our people, assets, neighbors and the environment during severe weather," said Marathon Petroleum spokesperson Jamal Kheiry in a Sept. 10 email.

Moving along the eastern Louisiana coast, storm surge and tropical storm watches are in effect for St. Bernard and St. Charles Parishes, which could impact another 315,000 b/d and 449,000 b/d of refinery capacity, respectively