Chevron's California refinery fire contained, not out yet

RICHMOND/HOUSTON (Reuters) - A massive fire struck at the core of Chevron Corp's large Richmond, California, refinery on Monday, spewing flames and a column of smoke into the air, threatening a prolonged outage that may increase prices of the costliest U.S. gasoline.

The fire was contained, but not extinguished, according to the company. The fire has blazed more than three hours after it erupted at the refinery in a densely populated industrial suburb of San Francisco. Smoke could be seen billowing over the Bay Area and four train stations were shut.

Nearby residents were ordered indoors after the fire hit the sole crude unit at the 245,000 barrel per day (bpd) plant, which accounts for one-eighth of California state's refining capacity.

The fire had started in the No. 4 crude unit, the only one at the plant, at 6:15 p.m. shortly after a leak was discovered, Chevron said. As the leak grew, workers were evacuated, plant manager Nigel Hearn told journalists at the site. He said some units were still operating, but gave no details.

It was not immediately clear when the fire would be put out and the extent of damage to the plant was not known.

"I walked outside and saw what looked like a lot of steam coming out of Chevron, way more than usual. I thought they must have blown a boiler," said Ryan Lackay, a 45-year-old employee at a chemical plant next door to the refinery.

"And then all of a sudden it just went whoosh, it ignited."

Crude distillation units (CDUs) break down oil into feedstock for other units in a refinery. It can take months to repair a CDU at a large plant, during which operations are typically severely limited.

Any lengthy disruption in production could affect the supply of fuel in the West Coast, particularly gasoline, due to the difficulty in meeting California's super-clean specifications. The region also has few immediate alternative supply sources.

"Chevron will have a hard time finding replacement barrels in an already short market," said Bob van der Valk, a petroleum industry analyst in Terry, Montana.

"Refineries are already drawing down summer blend inventory in anticipation of the switch back to winter blend gasoline."

TOWERING FLAMES, BLACK SMOKE

Residents of Richmond were advised to "shelter in place", an order often given during refinery accidents to shield against possible exposure to toxic chemicals or smoke. Sulfuric acid and nitrogen dioxide were released during the incident, according to a filing with the California Emergency Management Agency.

The refinery, the third largest in California and among the oldest in the country, is key to the economy of Richmond, a declining industrial city. But it has stirred controversy among local residents concerned about the environmental impacts and local politicians often seeking more tax revenues.

"I looked out the window and saw 40 foot flames and black smoke," Marc Mowrey, a Point Richmond resident who lives about a mile from the plant, said in a telephone interview.

He said the smell was not exceptional or very different from other days, but a huge plume of smoke was sitting over Richmond and neighboring El Cerrito.

Chevron said in a statement that there had been only one minor injury at the refinery, which at its peak 10 years ago employed over 1,300 people on a site of over 2,900 acres.

Last week, the refinery reported vapor leaks and a compressor failure to California pollution regulators, according to notices. The notices did not say which units were involved.

We are "very disappointed that this happened, and apologize that we are inconveniencing our neighbors," Chevron spokesman Walt Gill told local television.

A Reuters reporter who lives nearby said he heard some loud bangs and a siren as the fire erupted, but a Chevron spokesman denied reports of an explosion.

It is common to shut down the entire plant in the event of a major blaze. A February 17 fire at the CDU of BP Plc's 225,000 bpd Cherry Point, Washington, refinery led to a three-month shutdown and sent the regional price premium to more than $1 a gallon in some places.

(Additional reporting by Noel Randewich, Jonathan Weber in San Francisco; Editing by Miral Fahmy)

Source: http://news.yahoo.com/large-fire-chevrons-richmond-refinery-local-authorities-020742024--finance.html

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