Probes launched into fatal blast at Chevron refinery

LONDON Fri Jun 3, 2011 10:56am EDT

LONDON (Reuters) - Safety experts Friday launched an investigation into an explosion that killed four people and seriously injured a fifth worker at a Chevron Corp oil refinery in southwest Wales.

Britain's Health and Safety Executive (HSE) said it was launching a joint probe with police while Chevron started an investigation whose results it said were unlikely to be made public.

"We have immediately launched our own investigation which will run in tandem with the HSE's own investigation," a Chevron spokeswoman said in a statement read out at the plant.

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

Concerns over refining safety have reverberated through the U.S. oil industry since an explosion at a BP refinery in Texas City in 2005, after which BP released an internal probe which said safety shortcomings were common across the sector.

Chevron said it did not anticipate the blast would have an impact on the planned $730 million sale of the facility to U.S. independent refiner Valero, but Valero said it was too early to tell if the sale would be impacted.

Chevron shares shrugged off the disaster, trading down 0.4 percent at 1415 GMT, in line with rivals.

The blast occurred at the 220,000 barrel per day Pembroke refinery Thursday night. Police said a fire broke out after an explosion in a storage tank during maintenance. An adjacent storage tank was also damaged.

"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 Chevron spokeswoman said.

"The tank contained a component which refiners routinely use in the refining process."

According to the HSE, the Pembroke plant had received one formal warning notice over safety in recent years and had rectified the issue.

In contrast, the Coryton refinery in southeast England had been cited four times over safety before BP sold it to Swiss-based Petroplus Holdings AG and three notices were given to Exxon Mobil Corp's Fawley refinery in southern England.

NO DISRUPTION TO SUPPLIES

The Pembroke refinery is one of eight in the UK and accounts for about 12 percent of total capacity. Any closure of the plant would be unlikely to cause major disruption in Europe where supply already exceeds demand.

"It seems the incident was in a non-core 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, oil analyst at Business Monitor International.

But traders said it could boost prices and trim available exports of gasoline to the United States during the peak summer driving season.

Nearly half of the refinery's output is gasoline. The bulk of fuels are loaded from the refinery's port, with only around 10 percent distributed by road and pipe to the UK inland market, according to the UK Petroleum Industry Association.

(Additional reporting by Emma Farge; editing by Keith Weir and David Cowell)

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