June 3, 2011 at 9:33 am #2242
Chevron Investigates EU Wales Refinery Explosion & Deaths
LONDON (Reuters) 6/2/11 U.S.-based Chevron Corp (CVX.N) said on Friday it had launched an inquiry into an explosion at its oil refinery in southwest Wales which killed four people and seriously injured one.
Concerns over refining safety have reverberated through the U.S. oil industry since an explosion at a BP refinery in Texas City in 2005, after which BP said safety shortcomings were common across the sector.
“We have immediately launched our own investigation which will run in tandem with the HSE’s (Britain’s Health and Safety Executive regulator) own investigation,” a Chevron spokeswoman said in a statement read out at the plant.
“One storage tank is out of action and another is damaged but other than that the plant remains fully operational. However, given the circumstances, non-essential work has been suspended today.”
The blast occurred at the 220,000 barrel per day Pembroke refinery on Thursday evening. Police said a fire had broken out after an explosion in a storage tank during maintenance. An adjacent storage tank was also damaged.
“Tank maintenance is a regular occurrence and this was planned work involving members of our contractor workforce, routine work which had been carried out before.
“The tank contained a component which refiners routinely use in the refining process,” the Chevron spokeswoman said.
According to the HSE’s enforcement database, the Pembroke plant had received one enforcement notice in recent years.
This criticized the plant for “failure to demonstrate the company had identified safety instrumented systems,” though the HSE noted the enforcement notice had been complied with.
By comparison, four enforcement notices were issued to the Coryton refinery in southeast England, which was owned by BP before being sold to Swiss-based Petroplus Holdings AG (PPHN.VX), and three notices were given to Exxon Mobil Corp’s (XOM.N) Fawley refinery in southern England.
NO DISRUPTION TO SUPPLIES
The Pembroke refinery is one of eight operating refineries in the UK and accounts for about 12 percent of total online capacity. However, any closure of the plant would be unlikely to cause major disruption to supplies Europe where supply already exceeds demand.
“It seems the incident was in a non-core part of the refinery since it’s still running. There’s no reason why it should disrupt supplies anywhere in Europe. There’s overcapacity in the downstream sector anyway,” said Robert Beaman, oil analyst at Business Monitor International.
But traders said it could boost prices and trim available exports of gasoline to the United States during the peak summer driving season.
Nearly half of the refinery’s output is gasoline. The bulk of fuels are loaded from the refinery’s port, with only around 10 percent distributed by road and pipe to the UK inland market, according to the UK Petroleum Industry Association.
(Reporting by Olesya Dmitracova, Tom Bergin and Emma Farge; editing by Keith Weir)
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