Largest US oil refinery partially closes after second fire(Read article summary)
Royal Dutch Shell's Motiva oil refinery in Port Arthur, Texas will cut production for at least two weeks after the second fire at the facility in the span of a week.
Ever since undergoing a $10 billion expansion, the Motiva oil refinery in Port Arthur, Texas, has experienced a long line of incidents, the latest being a fire which has forced it to reduce production output by a half, for at least two weeks.
Only one week ago the 600,000 barrel a day facility, owned by Royal Dutch Shell and Saudi Aramco, suffered from a different fire, which caught in the sulphur recovery unit, forcing a closure and reducing production. The sulphur unit will undergo repairs, and is expected to go back into operation in two or three weeks.
This second fire, which began on Saturday, broke out in a hydrocracker unit next to the refinery`s largest crude distillation unit (CDU), known as the VPS-5. (Related article: Oil Well, Oil Facilities and Pipelines, New Targets in a New War)
A source with knowledge of the incident told Reuters that the fire damaged communication lines and instrumentation needed to run the 75,000 bpd hydrocracker, but its production sections were unharmed. Whilst the hydrocracker unit is being repaired the 325,000 barrel a day VPS-5 will be on warm circulation (standby).
Kimberly Windon, a spokesperson for Shell, explained that “several units that are integrated to this will run at reduced rates and others are being shut down,” whilst the repairs take place.
Refinery managers admitted that “it was a bad weekend for us. We're all feeling snake-bit. It just seems like we get up and going and then something else goes wrong.”
Even once the hydrocracker is ready to start-up again, the VPS-5 will be kept operating at 75,000 barrels a day below its capacity, due to a vibration affecting a key pipe. Near the end of 2014 it may then be fully shutdown in order to address the problem.
The vibration appeared when the CDU was restarted early in the year after it was shut-down for seven and a half months to repair the damage caused by a chemical leak that occurred just weeks after the initial opening of the refinery, following the five year expansion.
Prices for wholesale gasoline and ultra-low sulphur diesel on the Gulf Coast rose slightly.