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Feb 20, 2012, 10.12 AM IST | Source: Reuters

BP idles large Washington state refinery after fire

REFINERY-OPERATIONS-BP-CHERRYPOINT:BP idles large Washington state refinery after fire

By Erwin Seba and Katherine Luck

HOUSTON/SEATTLE (Reuters) - BP Plc idled production at its Cherry Point refinery in Washington state on Saturday, a day after a large fire broke out near the core crude oil unit of the third-largest plant on the West Coast.

The sole crude distillation unit, or CDU, at the 225,000 barrel-per-day refinery was shut following the one-hour blaze on Friday, said BP spokesman Scott Dean. All other units have been idled in warm standby mode ready for a quick restart while the CDU is being examined and plans made for restoring production.

Dean said there was no estimate available for how long it would take to restart the CDU and return production to normal. Refinery workers will have to determine the extent of damage from the blaze, a process expected to take up the weekend.

The fire was burning residual crude oil from the vacuum unit, Dean said.

The residual crude shot out of a flange in a pipe between a heater and the vacuum unit, which boosts production on the crude unit, igniting the blaze, according to a notice the refinery filed overnight with the U.S. National Response Center.

Hector Castro, a spokesman for the Washington State Department of Labor & Industries, said the fire had occurred in the crude unit.

The idling of the plant near Ferndale, Washington, which accounts for 8.7 percent of crude oil refining capacity on the West Coast, could drive up fuel prices next week.

"Wholesale gasoline could take a pretty good pop on Tuesday," said David Hackett, president of Stillwater Associates of Irvine, California.

Spot market gasoline prices in the Los Angeles market on Friday night jumped on news of the fire as traders braced for a potentially lengthy outage. The West Coast market is particularly sensitive to refinery glitches because it is largely isolated from the rest of the U.S. refinery system.

The CDU is at the heart of the refining process, breaking down thick molecules into feedstock that other units turn into finished fuel for cars, trucks and airplanes.

But BP could decide to bypass the CDU during repairs and run the other production units with feedstocks purchased on the market, Hackett said.

BP Cherry Point, which was built in 1971, was originally designed to run Alaska North Slope crude oil, but can now run a variety of crude, including heavy Canadian oil.

BP BACK IN FOCUS

While the fire caused no serious injuries, it could renew scrutiny of BP's operational practices in the United States. Fires of this magnitude rarely occur more than a few times in any given year in the United States. The Cherry Point refinery had not had a major fire in the past 10 years, Dean said.

A blast at BP's Texas City, Texas, refinery in 2005 killed 15 workers in one of the worst such accidents in decades, but the company later won praise from the United Steelworkers union, which represents most refinery workers, after spending over $1 billion to improve safety at its U.S. facilities.

At Cherry Point, one worker sustained a minor knee injury during the evacuation of over 800 workers from the plant, Dean said. That worker was taken to a local hospital and later released.

"They've practiced evacuations and for emergencies," Dean said. "I would say the training paid off."

Investigators from both federal and state agencies began a probe of the fire on Saturday, looking for failures in operating procedures and the emergency response.

The state Department of Labor & Industries inspectors will be allowed to see the site of the fire on Tuesday in order to begin an investigation that may take as long as six months, said Castro.

The refinery received 12 citations in 2010 from the state's worker safety regulator for serious violations in the safe management of processes involving highly hazardous chemicals at the hydrocracking unit.

BP did not appeal the 2010 citations, corrected the problems and paid $69,200 in fines, the department said in a press release at the time.

A federal investigation found extensive failures in the process safety management at the Texas City refinery. BP also launched an independent probe of safety at its U.S. refineries and found problems at all five of them, including Cherry Point.

In Washington state, the most recent refinery explosion was a deadly blast in April 2010 at Tesoro Corp's Anacortes, Washington, refinery that claimed the lives of seven workers.

(Editing by Jonathan Leff and Todd Eastham)

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