HOUSTON (Reuters) - Hurricane Laura could make a direct hit on Houston this week and hundreds of thousands of people living on the Gulf Coast should evacuate immediately, officials in Texas warned on Tuesday.

Crude oil production in the Gulf of Mexico has been paralyzed as companies batten down operations. Output cuts are nearing 90%, a level not seen since Hurricane Katrina in 2005.

Lina Hidalgo, the top executive for Harris County, which encompasses Houston, warned of deadly winds and a destructive storm surge after Laura makes landfall late Wednesday or early Thursday. She said that put millions of lives at risk as Laura moved westward and took aim at the fourth-biggest city in the United States.

"This storm certainly can cause unprecedented devastation," Hidalgo said at a news conference. "We truly have to say: Prepare for the worst."

The hurricane was packing winds of 75 miles per hour (120 km per hour) as it moved across the Gulf of Mexico, qualifying it as a Category 1 hurricane on the five-step Saffir-Simpson scale for measuring hurricane intensity.

Laura was forecast to become a "major" hurricane of Category 3 or higher by Wednesday night as it approaches the U.S. coast, according to the National Hurricane Center (NHC).

The storm was located about 525 miles (825 km) southeast of Lake Charles, Louisiana, on Tuesday afternoon and moving to the west-northwest at 16 miles per hour (26 kilometers per hour), the NHC said. The hurricane was expected to make landfall late Wednesday or early Thursday along the Texas-Louisiana border, the NHC said.

Laura could possibly land as a devastating Category 4 when it hits, said meteorologist Chris Kerr at agriculture, energy and weather data provider DTN.

 

PLAN FOR WORST

More than 420,000 Texas residents were under mandatory evacuation orders on Tuesday in Jefferson, Orange and Jasper Counties and the island city of Galveston.

Additionally, Hidalgo County issued voluntary evacuations for a huge swath of the coastal region surrounding Houston. Evacuation shelters are being readied in San Antonio, Dallas and Austin for people fleeing the coast.

"It's imperative that you make plans this morning to secure your homes and move you and your family to safety off island," Galveston's acting Mayor Craig Brown said in a statement.

Texas Governor Greg Abbott said the state's National Guard was heading to coastal communities with high-water vehicles and rescue helicopters to prepare for Laura's impact. Federal Emergency Management Agency (FEMA) Administrator Pete Gaynor said on Twitter that a team was already deployed to the region.

Lamar University in Beaumont, Texas, about 80 miles (129 km)east of Houston, was closed and its 15,000 students urged to evacuate, the school said.

The combination of a storm surge from Laura along with a high tide on the Texas and Louisiana Gulf Coast could result in water levels rising as high as 11 feet (3.4 meters), the NHC said. As much as a foot (0.3 meter) of rain could drop in isolated areas, causing widespread flooding.

 

ENERGY HIT

Oil producers evacuated 310 offshore facilities and shut 1.56 million barrels per day (bpd) of crude output, 84% of Gulf of Mexico's offshore production. This was close to the 90% outage that Hurricane Katrina brought 15 years ago.

Gasoline prices rose Tuesday in reaction to the shutdowns and have jumped 10.3% since Friday.

The storm's projected landfall area accounts for more than 45% of total U.S. petroleum refining capacity and 17% of oil production, according to the Energy Information Administration.

Cheniere Energy Inc <LNG.A>, the largest U.S. exporter of liquefied natural gas, evacuated staff and suspended operations at its Sabine Pass LNG export terminal on the Texas/Louisiana border.

 

(Reporting by Gary McWilliams, Erwin Seba and Liz Hampton in Denver, Colorado and Brad Brooks in Lubbock, Texas; Writing by Gabriella Borter and Brad Brooks; Editing by Marguerita Choy and Cynthia Osterman)