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Fire erupts at Chevron refinery near San Francisco, forces unit closures

08.07.2012  | 

In a Tuesday statement, Chevron said the main fire - which began at 6:15 p.m. local time on Monday - had been extinguished. All employees and contractors are safely accounted for, though three employees sustained minor injuries and were treated on site. Chevron has yet to speculate on the cause.

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By Ben DuBose
Online Editor

A fire broke out late Monday in a crude distillation unit (CDU) at Chevron’s 245,000 bpd Richmond refinery near San Francisco, California, likely forcing the closure of much of the facility.

In a Tuesday morning statement, Chevron said the main fire - which began at 6:15 p.m. local time on Monday - had been extinguished.

“Safety officials are allowing a small controlled burn as a safety measure to reduce pressure,” the company said.

“This is helping to ensure more hydrocarbons don't escape. This is similar in concept to how refineries utilize flares.

The fire caused the refinery to emit large clouds of sulfuric acid and nitrogen dioxide, Chevron said in a regulatory filing.

Smoke and flames could be seen for miles, media reports said, with numerous local residents going to hospitals with complaints of breathing problems.

Both refinery and Contra Costa County officials issued shelter-in-place alerts immediately following the incident, but those were ended around midnight local time.

All employees and contractors were safely accounted for, Chevron said. Three employees sustained minor injuries and were treated on site.

“We will not speculate on the cause of this incident,” Chevron said in a statement.

Chevron officials confirmed the shutting of the No. 4 CDU, where the fire broke out, but declined to discuss operations in other parts of the refinery.

However, traders say the whole refinery is likely to be shut, as is normal practice in such incidents, according to media reports including Dow Jones Newswires. Paul Sankey, an analyst with Deutsche Bank, wrote that the refinery is likely to be out for several months

The Richmond refinery is the largest refinery in the San Francisco area and accounts for nearly 10% of refining capacity on the US West Coast.

That could pressure gasoline margins higher in coming weeks, especially on the West Coast, according to industry analysts. It could also benefit other US refiners who may be needed to fill Chevron’s market share.

If the closure persists for a longer time, it could also impact global markets. The refinery runs primarily California crude, a variety of grades from Saudi Arabia as well as Iraqi Basra Light, according to reports.



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