By Georgina McCartney

HOUSTON (Reuters) – U.S. Gulf of Mexico offshore oil and gas producers are evacuating staff and curbing drilling as Tropical Storm Francine approaches the energy region, bringing high winds and heavy rains to the U.S. mid-South.

Francine is predicted to become the fourth hurricane of the Atlantic season, which ends on November 30. It may reach Category 1 status with winds up to 85 mph (137 kph) before making landfall on the Louisiana coast Wednesday evening, according to the National Hurricane Center (NHC).

Life-threatening storm surge and hurricane-force winds are likely for Southern Louisiana and upper Texas coasts this week. In preparation, New Orleans and surrounding communities are providing sandbags to residents to prevent flooding. Grand Isle, Louisiana, has announced voluntary evacuations and canceled school sessions for Tuesday.

The storm threatens offshore oil and gas production facilities and coastal liquefied natural gas (LNG) export plants. The NHC warns of potential storm surges between 5-10 feet (1.5-3 m) in coastal Louisiana.

U.S. federal offshore waters in the Gulf account for about 15% of total U.S. crude oil and 2% of natural gas production. Crude oil prices rose 1.5% on Monday due to uncertainties regarding potential production and refining disruptions caused by the storm. Meanwhile, natural gas futures fell by about 5% amid fears of reduced demand from Gulf Coast LNG export facilities.

OFFSHORE AND ONSHORE IMPACT

• Exxon Mobil (NYSE:XOM) has shut down output and evacuated staff from its Hoover offshore production platform, located approximately 150 miles (241 km) east of Corpus Christi, Texas.
• Shell (LON:SHEL) is evacuating non-essential personnel from three offshore oil platforms and has paused drilling operations on two others.
• Chevron (NYSE:CVX) is evacuating non-essential staff from four offshore platforms while maintaining normal production levels.
• BP (NYSE:BP) does not anticipate significant impacts to its Gulf operations.
• Occidental Petroleum (NYSE:OXY) and Woodside (OTC:WOPEY) are ready to implement their storm plans as necessary.
• Freeport LNG, the second-largest U.S. export plant for super-chilled gas, has begun storm preparations but has not disclosed specific details.
• Cheniere Energy (NYSE:LNG) has not provided comments on its Sabine Pass LNG facility. Sempra and Venture Global LNG did not respond regarding their liquefaction plants in Louisiana.

Heavy rainfall and flash flooding risks extend from northeast Mexico to parts of the Texas coast, southern Louisiana, and southern Mississippi, according to the NHC.

Navigational restrictions have been placed by the U.S. Coast Guard on some Texas ports, including Brownsville, Corpus Christi, and Freeport, which manage oil imports and exports. The ports of Houston, Galveston in Texas, and New Orleans in Louisiana remain open for vessel traffic as of Monday, while operations at the deepwater Louisiana Offshore Oil Port (LOOP) continue as normal.

Texas officials urge residents to prepare for potential flash flooding and heavy rain conditions. Local outages may occur if the storm impacts the state, warns the Texas electric grid. In July, Hurricane Beryl caused significant destruction, killing eight people and leaving more than 2 million customers without power for days in Texas, affecting energy infrastructure and gas stations.