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Shell Suspends Singapore Refinery After Fire

By Ann Koh and Yee Kai Pin – Sep 30, 2011 4:52 AM GMT+0100

Royal Dutch Shell Plc (RDSA) extinguished a fire that raged for two days at its largest oil refinery and said it’s shutting processing units at the Singapore plant as a precaution.

“The fire has been extinguished at Shell refinery at Pulau Bukom,” Europe’s biggest oil company said in a statement late yesterday. “However, there are traces of fuel vapor. We are prepared to shut down all refinery units if this is considered necessary from a safety perspective, with the exception of utilities.”

The fire at Pulau Bukom, an island 5.5 kilometers (3.4 miles) from Singapore’s financial center, broke out at 1:15 p.m. local time Sept. 28, Shell said. Local newspaper and television pictures showed flames rising from the plant amid reports of explosions. Singapore is Asia’s largest oil-trading, refining and storage center, with local product supply dominated by Shell’s Pulau Bukom, which can process 500,000 barrels a day of crude, and facilities operated by Exxon Mobil Corp.

“These accidents don’t happen very often in Singapore,” said Crystal Yu, 29, the co-owner of a claypot rice restaurant about 100 meters from Pasir Panjang jetty, the embarkation point for ferries to the Shell refinery. “As residents in this area, we worry about the safety concerns of such an incident. We’re worried that a big explosion or oil leaks onto the surface of the water and catches fire.”

Eighty Firefighters

Eighty firefighters battled the blaze that broke out in a pump house and forced the evacuation of about 400 workers, Shell said. Two fire engines were badly damaged and 250 workers remained on the site. There were no fatalities.

“We are progressively shutting down the refinery over the next two days” as a precaution, not because of damage, Martijn van Koten, Shell’s vice-president for eastern manufacturing operations, said yesterday at a Singapore press briefing. The company will halt other processing units at the site, including a petrochemical plant, if that’s what it takes to put out the fire, he said.

Company spokeswomen Mavis Kuek and Serene Loo didn’t immediately respond to requests today for information on the status of the shutdown.

A diesel-producing hydrocracker at the 50-year-old refinery was closed, boosting regional fuel prices, almost 23 years to the day after a fire killed a worker at the site. Shell has operated in Singapore for about 120 years.

‘Significant Not Dramatic’

Gasoil, or diesel, rose to the highest in four weeks against Dubai crude, signaling increased processing profit. Gasoil swaps for October traded at $18.16 a barrel over the Asian benchmark crude today, the biggest premium since Sept. 2, according to data from PVM Oil Associates Ltd., a London-based broker. This crack spread was $16.22 before the unit was shut.

“The impact is significant but not dramatic,” David Wech, head of research at JBC Energy GmbH, a consultant in Vienna, said in an e-mail. “It will be a question of how long the plants are off. We expect a week at least.’

Shell purchased diesel and gasoline cargoes in Singapore’s spot market yesterday, according to a Bloomberg News survey of traders monitoring transactions. It bought 150,000 barrels of ultra-low-sulfur diesel from Hin Leong Trading Pte and 50,000 barrels of 95-RON gasoline from BP Plc.

Gasoline and diesel fuel were burning at the facility, Kuek said Sept. 28. One of Shell’s firefighters was injured and five others experienced heat exhaustion and ‘‘pulled muscle,” the company said.

‘Pipes Opened Up’

“The incident occurs in an area between the processing facility, including the hydrocracker, and the product tank farm,” said van Koten. “One or more pipes opened up and the product inside fell and fed the fire.”

Shell’s Pulau Bukom facility also houses an 800,000 metric ton-a-year ethylene plant and a 155,000 ton-a-year butadiene- extraction unit, according to its website. The refinery, which includes a fluid catalytic cracker that makes gasoline, exports 90 percent of its products to Asia-Pacific.

A Malaysian contractor was killed in a fire at the plant on Sept. 29, 1988, National Library archives showed.

Shell also has production facilities on neighboring Jurong Island, where refineries belonging to Exxon Mobil and Singapore Refining Co., a joint venture between Chevron Corp. and Singapore Petroleum Co., are located. Exxon was ordered to stop work for a day at another Singapore refinery in March after a 34-year-old worker was killed during plant maintenance.

To contact the reporters on this story: Ann Koh in Singapore at [email protected]; Yee Kai Pin in Singapore at [email protected]

To contact the editor responsible for this story: Paul Gordon at [email protected]

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