Storm Francine veers path, could potentially hit petchems hubs in west Louisiana

SAO PAULO (ICIS)–Storm Francine continues strengthening into a hurricane as it approaches the southern costs of the US, but its path could veer slightly west and potentially hit key petrochemicals sites in Louisiana which border with Texas.

According to a Tuesday morning update from the US’ National Hurricane Center (NHC), the storm is to become a hurricane when it makes landfall later in the day, although it should weaken soon after that as it heads north.

On Monday, the NHC already said the storm would develop into a hurricane, but its forecasted trajectory then was to hit central parts of Louisiana – including New Orleans – but not the industrious western part of the state.

Louisiana has declared a state of emergency; the state has just commemorated the 19th anniversary of Hurricane Katrina, which brought havoc to New Orleans’ outer and poorer suburbs from which many are still recovering.

If the current, Tuesday morning forecast holds, key petrochemicals-heavy municipalities in Louisiana such Plaquemine, Geismar, Baton Rouge, and Taft, among others, could be hit by Francine’s gusts.

Companies such as Methanex or CF Industries, with production facilities in the areas, had not responded to a request for comment about their hurricane preparations at the time of writing.

“Francine is moving toward the north-northeast near 8 mph (13 km/h).  A turn to the northeast with an increase in forward speed is expected later today or tonight.  On the forecast track, Francine is anticipated to be just offshore of the coasts of northeastern Mexico and southern Texas through this [Tuesday] afternoon, and then move across the northwestern Gulf of Mexico, making landfall in Louisiana on Wednesday,” said the NHC.

“After landfall, the center is expected to move into Mississippi on Wednesday night or Thursday. Maximum sustained winds are near 65 mph (100 km/h) with higher gusts. Strengthening is expected through Wednesday morning, and Francine will likely become a hurricane later today or tonight [Tuesday]. Francine is expected to weaken quickly after landfall.”

CHEMICALS, OIL, GAS
Louisiana is home to many large petrochemical hubs that produce polyolefins, polyvinyl chloride (PVC), caustic soda, ethylene oxide (EO), ethylene glycol (EG), isocyanates, polyols, and ammonia among many others. The state has numerous refineries.

Several offshore oil wells are off of the coast of Louisiana. Companies will often evacuate them and shut-in oil wells – majors such as Shell or ExxonMobil have announced so.

The Gulf of Mexico accounts for about 14% of total US crude production and 5% of dry gas production, according to the country’s Energy Information Administration (EIA).

The state is home to the Louisiana Offshore Oil Port (LOOP), the only deepwater oil port in the US.

If the port shuts down, then the US would lose an important outlet for oil exports. That could offset some of the shut-in wells.

Louisiana is also home to two large terminals that export liquefied natural gas (LNG) in the western part of the state. Sabine Pass LNG is in Sabine, Louisiana, and Cameron LNG is in Hackberry, Louisiana.

Any shutdowns could affect domestic natural gas markets if the terminals spend too much time offline.

Domestic gas supplies could build up, causing local prices to fall. Prices for ethane, the predominant feedstock for ethylene production, typically follow those for natural gas.

Ethane prices could fall further if Francine disrupts operations at any of the crackers in Louisiana.

LOUISIANA VS TEXAS IMPACT
Residents of the Gulf Coast, from Mexico’s Yucatan peninsula to the US’ state of Alabama, are well accustomed to living with extreme weather events.

In times of storms and hurricanes, many turn to specialized sites such as Space City Weather, which on Tuesday did not seem too worried for the fate of Texas – more so about Louisiana’s.

Space City Weather’s main analyst, Houston-based Eric Berger, reiterated on Tuesday the hurricane will be “no joke” in Louisiana, even if for many Texans it will have looked like more like “a regular late” summer day.

“The tropical system will remain well offshore from Texas, and effects for most of our area will be minimal. In fact, I would go so far as to say that by tomorrow [Wednesday] people in Houston will be going, ‘Hurricane? What hurricane. This was a joke.’ Well, people who didn’t know better will be thinking that at least — but not readers of this site,” said Berger.

“Francine will not be a joke for southern Louisiana. The tropical storm has sustained winds of 65 mph and is likely to move inland Wednesday afternoon or evening as a Category 2 hurricane. The state’s most populated area, from Baton Rouge to New Orleans, will be directly impacted with winds, rains and storm surge.”

The analyst concluded saying that for the most part Houstonians will not be able to tell a hurricane is passing offshore on Tuesday and Wednesday.

“Skies will be mostly cloudy, with highs in the mid-80s [degrees Fahrenheit, around 29°C], which is cooler than normal for this time of year,” said Berger.

“Perhaps that’s our greatest takeaway from this storm, some slightly cooler days. I’m not complaining.”

Source: US National Hurricane Center