Chevron launches investigation into UK refinery blast

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, June 3 -- Chevron Corp. said it has launched an investigation into the causes of an explosion that killed four people and injured another at its 220,000 b/d refinery in Pembroke, South Wales, UK.

"We have immediately launched our own investigation which will run in tandem with the HSE's [Britain's Health and Safety Executive regulator] own investigation," a Chevron spokeswoman said.

"One storage tank is out of action and another is damaged but other than that the plant remains fully operational. However, given the circumstances, nonessential work has been suspended today," she said.

Chevron confirmed a statement by local police that a fire erupted after an explosion in a storage tank during maintenance, damaging an adjacent storage tank at the same time.

"Tank maintenance is a regular occurrence and this was planned work involving members of our contractor workforce, routine work which had been carried out before,” the spokeswoman said.

"The tank contained a component which refiners routinely use in the refining process," she said, without detailing the component.

The Pembroke refinery is one of eight operating refineries in the UK and accounts for about 12% of total online capacity, but analysts did not think the accident would affect supplies or prices.

"It seems the incident was in a noncore part of the refinery since it's still running. There's no reason why it should disrupt supplies anywhere in Europe. There's overcapacity in the downstream sector anyway," said Robert Beaman, an oil analyst at consultant Business Monitor International.

The facility processes crude from the North Sea, Russia, and West Africa into 17 products, including gasoline, diesel fuel, kerosine, liquefied petroleum gas, and petrochemical feedstocks. The refinery produces 3.5 million gpd of gasoline, which is about 50% of the refinery's total production.

In March, Chevron agreed to sell the Pembroke refinery to Valero Energy Corp. for $730 million, plus an additional payment estimated to be $1 billion for Chevron Ltd.’s inventory and other items.

Chevron said the agreement, subject to customary regulatory approvals, was expected to be completed during this year’s second half. A Valero spokesman could not comment on operations at Pembroke as his firm’s purchase of the plant has not yet closed.

Contact Eric Watkins at [email protected].