Friday, October 12, 2012

Richmond Oil Refining Unit to Remain Shut Through 2012

The central crude oil refining unit at Chevron Corp’s Richmond, California petroleum refinery, which has been out of operation since a fire broke out at the facility Aug. 6, will remain closed through the rest of the year, the company announced Oct. 9.

Before the fire, the 2,900-acre facility, which is in the San Francisco Bay area, was processing about 242,000 barrels of crude oil daily, with the end products primarily being diesel and jet fuels, as well as gasoline. But since the blaze, production of motor fuel at the facility has been cut by more than 50 percent.

The Richmond refinery is one of 21 refineries in California, but the 242,000 barrels of daily crude it was processing accounted for 12 percent of the state’s 2.09 million barrels per day of net capacity.

A refining unit performs the initial filtering of crude oil coming into a refinery and produces raw materials for all other units. The blaze is believed to have occurred after a diesel leak near a pump at the distillation unit. A combustible hydrocarbon liquid known as “gas-oil” leaked from an eight-inch pipe connected to a crude oil distillation tower in the refinery’s crude unit, according to the federal Chemical Safety Board, which investigated the incident.

Workers were reportedly in the process of repairing piping connected to the still-operating distillation tower, according to the CSB, when the leak intensified. Due to the high temperature of the material in the tower, in excess of 600 degrees Fahrenheit, the gas-oil immediately formed a large flammable vapor cloud.

Oil and gas prices in California spiked in the fire’s aftermath, with the Oil Price Information Service reporting that retail gas prices had gone up as much as 50 cents per gallon in the days following the fire. California has taken various steps to meet demand, including increasing product imports from Asia and elsewhere.

In an interim quarterly update to investors, Chevron revealed that during the first two months of the third quarter, US refinery crude-input volumes decreased by 92,000 barrels per day compared to the second quarter, largely due to the shutdown of the Richmond refinery crude unit.