Hurricane Ida continues to strengthen as it heads to Louisiana

HOUSTON (ICIS)–Hurricane Ida continues to strengthen as continues its path toward the southeastern Louisiana coast, likely as a category four hurricane, spurring a hurricane warning to be issued for the state from Intracoastal City to New Orleans.

Shell has initiated a safe and orderly shutdown of its manufacturing facilities in Geismar and Norco, Louisiana in anticipation of Hurricane Ida, it said.

Phillips 66 has begun safe shutdown of its Alliance refinery in Belle Chasse.

Major chemical facilities in the region like NOVA Chemical and Huntsman have said they are continuing to monitor the storm, as publication time.

ExxonMobil has begun its hurricane preparedness process, but operations at Baton Rouge and Beaumont are normal, it said. Sasol has activated inclement weather plans at US Gulf Coast locations, and operations at Lake Charles are normal as of Friday evening.

Huntsman said it had no plans to reduce operating rates at this time.

At 21:00 GMT the storm is currently about 90 miles (145 km) southwest of Havana, Cuba. Maximum sustained winds are near 80 miles/hour with higher gusts, according to the National Hurricane Center.

Ida is moving toward the northwest near 15 miles/hour (24 km), and this general motion should continue until Ida reaches the northern Gulf Coast on Sunday.

The centre of the storm will pass over western Cuba this evening and will continue to strengthen as it moves over southeastern and central Gulf of Mexico over the weekend as a major hurricane.

The storm has possibility of causing severe damage to businesses and homes due to torrential rains, strong winds, flooding. In addition to causing power outages in the area.

The following map shows the possible path of the storm.

Source: National Hurricane Center

Companies have started evacuating platforms and shutting in production, according to the US Bureau of Safety and Environmental Enforcement (BSEE).

So far, 89 production platforms have been evacuated in the Gulf of Mexico, representing 15.89% of the total.

Producers have shut-in 58.51% of oil production in the Gulf of Mexico, according to the BSEE. For natural gas, 48.79% is shut in.

Shell, BP, and Chevron are all shutting-in oil production and evacuating personal from its platforms ahead of the storm.

The Gulf federal offshore oil production accounts for 17% of total US crude output, according to the Energy Information Agency (EIA).

The Louisiana region is home to petrochemical plants and refineries. Many companies are still recovering from disruptions caused by Winter Storm Uri last February and the active 2020 hurricane season.

Markets could face another wave of disruptions if the storm makes landfall in Louisiana as a major hurricane.

An estimated 35% of North American styrene production capacity is in the path of Hurricane Ida.

Although the styrene market has recovered from earlier supply disruptions and outages that stemmed from the mid-February winter storm, outages at these sites would have an immediate impact on styrene market dynamics.

In addition, an estimated 20% of US butadiene (BD) production capacity is in the path of the storm. Prolonged outages at these sites would add to ongoing production issues in Houston and exacerbate an already tight domestic supply situation.

Up to 38% of US base oil production capacity could be dealing with effects of Ida. Shutdowns or damage would tighten supplies further as US producers already struggle to meet demand with months-long backlogs.

The storm could also disrupt chlorine production and significant production capacity of polyvinyl chloride (PVC).

In recent weeks, US chlor-alkali and PVC production had returned to near-normal output levels after a year of weather-related disruptions and shortages that have pushed prices to record highs.

In addition, the US fertilizer industry is carefully watching the storm closely as it is current trek puts it on a path to impact New Orleans, which is a key centre for the industry with crucial barge operations in the area.

As the storm moves inland there is also potential impacts to production operations of major domestic producers, including both CF Industries and Mosaic, who have manufacturing facilities in the region.

Ports on the path of Ida have begun preparations, advancing to Condition X-Ray, but remain open. Condition X-Ray means that a tropical storm or a hurricane-force storm is predicted to make landfall within 48 hours.

The ports affected are in Mobile, Alabama; New Orleans, Louisiana; and Pascagoula, Mississippi.

The port in Lake Charles, Louisiana, is expected to move to the same status late Friday afternoon.

Port Fourchon, Louisiana, has moved to Storm Phase 3, which is a recommended evacuation for non-essential personnel.

Texas-area ports remain on Condition Whiskey, which means a tropical storm or a hurricane-force storm is predicted to make landfall within 72 hours.

These ports are in Beaumont/Port Arthur, Galveston, Freeport and Houston.

Meanwhile, the flood gates in New Orleans will close by Saturday afternoon, the railroad company BNSF said.

The gates will close at 14:00 local time (19:00 GMT). The closure will affect all eastward and westward rail routes going through New Orleans, including interchange routes on other carriers.

BNSF will cancel all rail operations between Lafayette, Louisiana and New Orleans mid-day Saturday.

Additional reporting by Al Greenwood, Anna Matherne, Amanda Hay, John Donnelly, Antoinette Smith, Michael Sims, Zachary Moore, Bill Bowen, Mark Milam, Tracy Dang

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