UPDATE 3-Biggest U.S. oil refinery stumbles after fire

(Recasts to focus on previous problems, adds details on lastfire) By Erwin Seba HOUSTON, Aug 19 (Reuters) - The largest oil refinery in theUnited States was forced to shut key units after a fire thisweekend, the latest in a string of mishaps following a $10billion expansion at the Motiva plant in Port Arthur, Texas. Royal Dutch Shell Plc - which owns the refinerywith Saudi Aramco - said output was crimped after thefire on Saturday caused reductions and shutdowns at the 600,000barrel-per-day (bpd) refinery. The U.S. Gulf Coast refined oil markets had a mutedreaction. U.S. Gulf Coast gasoline and ultra-low sulfur dieselprices relative to the New York Mercantile Exchange barely roseon Monday because the region is well supplied. Sources familiar with work at the plant said on Monday thefire, the second in a week, broke out in a hydrocracker unitnext to the largest of the refinery's three crude distillationunits, known as VPS-5, which is responsible for more than halfof the facility's production. Genscape, an energy industry intelligence service, said the 325,000 bpd VPS-5 CDU was shut Sunday afternoon and remaineddown on Monday. The unit was already running at reducedcapacity. The 110,000 bpd naphtha hydrotreater was also shut brieflybut was restarted Sunday night, Genscape said. The sources said the 75,000 bpd hydrocracker, which boostsoutput of motor fuel by refining feedstocks under high pressurewith hydrogen, was still not working. "Several units that are integrated to this will runat reduced rates and others are being shut down," while repairsare underway, Shell spokeswoman Kimberly Windon said. Windon added there were no related injuries at the plant,which has about 3.4 percent of U.S. refining capacity. SERIES OF SETBACKS The weekend fire was the latest in a series of setbacks atthe refinery, where the VPS-5 crude distillation unit (CDU) isexpected to run up to 75,000 bpd below capacity for more than ayear due to a piping issue. The CDU has been beset by vibration problems when Motivaattempted to run it at or near its full capacity, Reutersexclusively reported on Friday. The company may shut the crude unit in fall 2014 to fix thepersistant vibration problems, sources told Reuters on Friday. The unit has been running at reduced rates ranging between250,000 bpd and 285,000 bpd since it restarted production earlythis year. The first attempt to start the unit, at the end of a 5-yearexpansion of the plant, was hampered by a chemical leak in June2012 that caused seven and a half months of work and delays. A week ago, a blaze shut the sulfur recovery unit and led toa reduction in refinery production at the plant. The sulfur unitis slated to be down for two to three weeks. In that incident, a hole 5-feet long (1.5 meters) and 1-footwide (30.5 centimeters) was melted in the side of the unit thatremoves sulfur from hydrogen sulfide gas produced in therefining of crude oil into motor fuels. "It is not unusual for a sulfur unit to have problems,especially at the biggest refinery in the United States. It is abad place to have an issue because once it's shut down you'llhave to shut other units like hydrotreaters that feed into it,"said John Auers, refinery specialist with Turner, Mason &Company in Dallas. (Additional reporting by Selam Gebrekidan in new York andKristen Hays in Houston; Editing by Terry Wade and Andrew Hay)