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Share Price: 491.30
Bid: 490.50
Ask: 490.60
Change: 2.00 (0.41%)
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Open: 491.00
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UPDATE 5-Chicago wholesale gasoline prices rise on BP Whiting refinery fire

Thu, 28th Aug 2014 20:15

* BP says expects minimal impact from late Wednesday blaze

* One worker taken to area hospital, but later released (Adds Genscape information, paragraphs 8-10)

By Michael Hirtzer

WHITING, Ind., Aug 28 (Reuters) - Wholesale gasoline pricessurged in Chicago on Thursday after a fire hit a piece ofequipment used to make gasoline at BP Plc's refinery innearby Whiting, Indiana, trade and industry sources said.

BP said the fire was extinguished at its biggest U.S. plantand it expects little impact on production. The 413,500 barrelper day (bpd) refinery, which BP spent $4 billion expanding tohandle more heavy Canadian crude, was still operating.

But gasoline prices rose as traders worried about Whiting,the largest refinery in the U.S. Midwest. They said Chicago CBOBgasoline traded at a 13.00 cent premium to October RBOB futureson the New York Mercantile Exchange, up 5.50 cents per gallonfrom Wednesday's finish.

Whiting Fire Chief Gus Danielides told Reuters the fire,which was put out by BP's firefighters, appeared to have startedin a compressor the size of a large room.

Residents said they heard a loud boom just as the firestarted, prompting them to wonder if they should evacuate.

"The doors rattled and the TV shook a little bit," saidJennifer Lopez, whose house sits about a mile from the plant."You don't know what's going to happen with so many oil tanksnearby."

Trade and industry sources said the fire was confined to ahydrotreater for a gasoline-producing fluidic catalytic crackingunit (FCCU). Hydrotreaters, which use hydrogen to reduce sulfurin motor fuels, normally have compressor equipment.

Energy industry intelligence service Genscape said the firehit a hydrotreater that removes sulfur from feedstock going tothe FCCU. Genscape does not monitor the hydrotreater, but basedits analysis on video of the fire from local televisionstations.

Both FCCUs at the Whiting refinery appeared to be operatingnormally, Genscape said. It said a blending oil unit appeared tobe shut. It went out of production at about 9 p.m. Wednesdaylocal time (0200 GMT Thursday) when fire broke out.

The blending unit also removes sulfur from distillate andgas oil feeds, Genscape said. The FCCU refines gasoil intogasoline.

BP did not specify which unit was affected by the blaze, butsaid it was on the north end of the refinery.

There are two FCCUs at the refinery and two hydrotreaters.One hydrotreater has a capacity of 105,000 bpd and the other100,000 bpd. It was unclear if both FCCUs can get by with justone hydrotreater. One of the FCCUs has a capacity of 110,000 bpdand the other can process 65,000 bpd.

One worker was taken to an area hospital for treatment andthen released, the company said after the two-hour blaze.

BP said operations "were minimally impacted" and added that"the refinery continues to produce products for customers."

In March, several barrels of oil leaked from the refineryinto Lake Michigan.

Small fires and other accidents at refineries are common,said Daniel Horowitz, managing director for the U.S. ChemicalSafety Board. He said the board will follow up with BP, but isunlikely to investigate a case that does not involve fatalitiesor offsite damage.

The Whiting refinery, the seventh-largest refinery in theUnited States and the largest outside of the Gulf Coast, is thecenterpiece of BP's shift to using more of the cheaper, heavyCanadian crude oil from tar sands fields in Alberta.

In November, BP completed a revamp of the refinery to boostintake of Canadian crude from 85,000 bpd to 350,000 bpd.

On July 29, BP's Chief Executive Bob Dudley said Whiting hadbeen refining 270,000 bpd in heavy crude oil in the secondquarter of this year and could likely run up to 300,000 bpd.

In 2005, an explosion at a BP refinery in Texas City, Texas,killed 15 people. The company later sold that refinery. (Additional reporting by Erwin Seba, Kristen Hays and JessicaResnick-Ault; Writing by Terry Wade, Editing by MeredithMazzilli and David Gregorio)

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