August 7, 2012 / 1:27 PM / 6 years ago

Big Bay Area refinery blaze extinguished; plant idled

RICHMOND, California (Reuters) - A massive fire that shut down Chevron Corp’s large Richmond, California, refinery on Monday, was extinguished by the early hours of Tuesday, Chevron said, leaving residents and oil traders seeking answers to the hours-long blaze.

A plume of smoke emits from a fire that broke out at a Chevron oil efinery in Richmond, California August 6, 2012. REUTERS/Brady Reddall

The fire that spewed flames and a column of smoke high above the densely populated industrial suburb of east San Francisco Bay shortly after 6 p.m. local time on Monday was contained by 11 p.m., the company said. It had been completely put out by early morning, according to the company and a KGO-TV report.

An order for more than 100,000 nearby residents to remain indoors had also been lifted, and local transit stations had reopened, authorities said. About 200 people have sought medical help, complaining of respiratory problems, the San Pablo, California-based Doctors Medical Center said.

Oil traders were bracing for a likely spike in regional gasoline prices on expectations that the 245,000 barrel-per-day (bpd) plant, which accounts for one-eighth of California state’s refining capacity, would likely be shut down completely, possibly for weeks or months, based on recent precedent.

In Richmond, where residents have long lived in the shadow of one of the oldest refineries in the United States, some wondered if it would sharpen debate between residents, who worry about the environmental impact of the plant, and politicians who often seek more tax revenues for the declining industrial city.

“Where is everyone?” asked Mohammed Abolghasem, the Iranian-born owner of Cafe Altura in nearby Point Richmond, as he looked across the street at a bar that was closed early while sirens blared and helicopters swirled overhead.

Abolghasem said that when he was growing up in Iran everyone knew not to live near refineries, and he was now wondering if he should move. “I love living in this city,” he said. “It’s beautiful. But next to a refinery, what do you expect?”

CRUDE UNIT

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. The company said there had been only one minor injury among workers.

It was not immediately clear what the extent of damage was to the plant. KGO-TV said online that the plant had shut down all production, which is common in cases of major fires.

The impact on markets now depends on the duration of the closure. 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.

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.”

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.

Local residents had been 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.

Additional reporting by Noel Randewich, Jonathan Weber in San Francisco, Manash Goswami in Singapore; Editing by Maureen Bavdek

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