Coffeyville Kansas refinery underwater

OVERLAND PARK, Kansas Tue Jul 3, 2007 3:35pm EDT

Aerial view shows oil spill from Coffeyville Resources refinery in the Verdigris River in Coffeyville, Kansas July 2, 2007. Coffeyville Resources' oil refinery in Kansas was submerged under four to six feet of water due to flooding, a Montgomery County Emergency Management coordinator said Tuesday. REUTERS/Cindy Price/The Coffeyville Journal/Handout

Aerial view shows oil spill from Coffeyville Resources refinery in the Verdigris River in Coffeyville, Kansas July 2, 2007. Coffeyville Resources' oil refinery in Kansas was submerged under four to six feet of water due to flooding, a Montgomery County Emergency Management coordinator said Tuesday.

Credit: Reuters/Cindy Price/The Coffeyville Journal/Handout

OVERLAND PARK, Kansas (Reuters) - Coffeyville Resources said much of its 108,000 barrel-per-day Kansas refinery remained submerged on Tuesday, hampering its efforts to assess damage from a devastating weekend flood and the extent of an oil spill from the refinery.

"It is still underwater," said Deborah Wood-Pope, a Coffeyville Resources spokeswoman, who was part of a team of company officials converged on dry ground outside the plant.

"They're trying to get in there and find out what they can find out. But it is on low ground and it is on the side where the levee was breached," she said.

Company officials used a boat to get to the plant Tuesday but Wood-Pope said refinery officials would have to wait until the waters receded significantly before they could determine the level of damage, the amount of oil spilled and when the refinery might come back online.

Company officials said they were able to confirm, however, that the refinery tank containing the crude oil that overflowed during the flood's early hours has been isolated and secured.

The nitrogen fertilizer facility, located at a higher elevation, was less impacted but also remains closed, the company said.

Refinery officials initially estimated the spill at more than 1,000 barrels, or about 40,000 gallons, but have since hesitated to offer an estimate.

The spill was detected early Sunday morning after the town of Coffeyville, population 11,400, was swamped with waters that rose more than 30 feet. The oil has since contaminated the floodwaters that has swept into homes and businesses and has contaminated the Verdigris River, sparking fears about the quality of downstream drinking water supplies.

The cause of the spill remained unclear. Wood-Pope said that a combination of "high water and gravity" were the chief factors, and discounted talk that rushed efforts to evacuate the plant may have led to an error in shutting down a pump.

She did say, however, that the floodwater overtook the plant so fast on Friday that some employees being evacuated were unable to move their cars from the parking lot before they were caught in the rapidly rising water.

The U.S. Environmental Protection Agency is on site in Coffeyville and has brought in a coordinator from its Gulf Coast region who helped in the clean up of refineries damaged by Hurricane Katrina, said EPA spokeswoman Dianne Whitaker.

The agency is testing water supplies in the region but does not expect to have any test results until later in the week.

Coffeyville Resources is owned by CVR Energy Inc., a unit of Goldman Sachs and the Kelso Funds. CVR had been expected to launch its initial public offering of stock on the New York Stock Exchange later this year.

Some gasoline traders on the Gulf Coast expected the refinery to be out of service for months due to water damage to the refinery infrastructure.

The gasoline cash market reacted bullishly on Monday, with the Midwest Group Three gasoline cash differential climbing about 13 cents a gallon.

Pumps and electronic control systems at refineries are very vulnerable to damage from flooding. Three Louisiana refineries were shut for months after Hurricane Katrina, while workers made replaced damaged components. Extensive damage inflicted on the regional power grid by the storm as well as shortages of housing for workers further complicated repairs.

(Additional reporting by Edgar Ang and Robert Campbell)

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