Fire-hit Chevron California crude unit seen shut 6 months: IIR

Reuters News
Posted: Aug 13, 2012 12:00 PM
Fire-hit Chevron California crude unit seen shut 6 months: IIR

NEW YORK (Reuters) - The sole crude distillation unit at Chevron Corp's large Richmond, California, refinery may be shut for at least four to six months after last week's fire, industry intelligence group IIR Energy said in a report that suggests the outage may be twice as long as feared.

Investigators have found "extensive damage" in the cooling towers, pipe racks and heater tower, IIR Energy told clients on Friday.

Neither Chevron nor investigators have given any timeline for resuming full operations at the 245,000-barrel-per-day plant, California's second largest, following an August 6 fire at its crude unit that caused a spike in regional gasoline prices.

A Chevron spokesman on Monday reiterated only that the No. 4 crude oil unit -- the only one at the plant -- was still shut down while other parts of the plant were operating.

Sources at the refinery said last week the unit could be shuttered for up to three months. The fire erupted at a pump leaking a substance similar to diesel, according to a preliminary report the company filed with county pollution regulators last week.

IIR Energy, which employees hundreds of researchers to gather operational information, first hand, about industrial facilities across the world, said that Chevron had not yet decided whether it would continue to operate some secondary units that are running down on-hand feedstock inventories.

Chevron could buy intermediate feed from the market, although in most cases it is difficult for a refiner that has shut down its crude unit to secure enough of this type of oil to keep producing motor fuels at the same rate. Last week, the plant was producing gasoline at over 50 percent capacity, sources said.

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The fire damaged the only atmospheric tower on the CDU, the unit that begins converting crude oil to motor fuel. The CDU makes feedstock for all other units at the refinery.

The blaze, which broke out as workers and the refinery's fire department were evaluating a leak at the pump, sent 949 area residents to an area hospital complaining of respiratory problems and eye irritation among other symptoms.

(Reporting by Jonathan Leff; editing by Jeffrey Benkoe and Marguerita Choy)