UPDATE 5-One dead as fire hits Chevron refinery in Mississippi

Fri Nov 15, 2013 3:58pm EST

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HOUSTON, Nov 15 (Reuters) - A Chevron Corp worker was killed in a fire that broke out early Friday morning at a cracking unit at the U.S. oil company's 330,000-barrel-per-day refinery in Pascagoula, Mississippi.

Tonya Graddy, an "operator" with 5 years of service, was killed after a fire broke out at a furnace in a gasoline-making unit known as the "Cracking II area," Chevron said.

All other workers were accounted for after the plant's emergency teams put out the fire that started at 2 a.m. CST (0800 GMT), the company and officials from Jackson County and Pascagoula said.

The fire, which is under investigation, happened a day after a Chevron pipeline unrelated to the refinery exploded in rural Milford, Texas - shooting flames high into the air and prompting evacuations but causing no injuries.

The mishap was the latest in a string of accidents in the booming U.S. energy sector.

Chevron's board trimmed Chief Executive John Watson's 2012 bonus in a bid to hold managers accountable for "operational incidents" such as a major refinery fire in California, according to a filing with the U.S. Securities and Exchange Commission earlier this year.

Still, the Pascagoula refinery has received few citations for safety violations from the U.S. Occupational Safety and Health Administration.

OSHA cited the refinery in 2009 for 10 serious violations and 1 other violation as part of a nationwide effort to improve refinery safety after a deadly explosion in 2005 at what was then BP Plc's Texas City plant.

Cash gasoline prices on the U.S. Gulf Coast spiked briefly on news of Friday's fire before retreating, traders said.

MAINTENANCE BEFORE FIRE

The Pascagoula refinery appeared to have been undergoing some maintenance work before the fire, according to energy intelligence group Genscape, which reported on Thursday that a unit had shut down and then had begun restarting with another unit.

Genscape, which monitors activities at refineries by camera, said on Friday the restart of the 55,000-bpd catalytic reformer, which turns naphtha into gasoline components, was halted at the time of the fire.

It said the restart of a 29,000-bpd hydrocracker, which uses hydrogen to break down molecules into other refined products, had been completed and that all other units were online.

Chevron did not comment on the Genscape reports.

The refinery, which began operating in 1963, is the largest of three in Mississippi.

The plant can process and treat low-grade heavier, sour, foreign crude oil. It produces about 130,000 bpd of motor gasoline, 50,000 bpd of jet fuel and 68,000 bpd of diesel fuel, according to Chevron's website.

The Gulf Coast refinery network has started to emerge from seasonal work that drained stockpiles after plants cranked up runs to binge on cheap domestic feedstock and ship products abroad.

Since the start of September, distillate stockpiles in the region have fallen by 3.5 million barrels to 38.5 million barrels, nearly 2.8 million barrels below the five-year seasonal average. Gasoline inventories are off 5.2 million barrels over the past nine weeks, but at nearly 73 million barrels are 1.1 million barrels above the five-year average.

Donnie Carlson, Pascagoula's deputy fire chief, said the city's crews were put on standby in a staging area but did not fight the fire.

"The fire's out," he said.

Shares of Chevron were up 30 cents at $119.86 in afternoon trading on Friday. (Reporting by NR Sethuraman in Bangalore; Sabina Zawadzki, Scott DiSavino, and Matthew Robinson in New York, and Erwin Seba in Houston; Writing by Terry Wade; Editing by Lisa Von Ahn and Chris Reese)

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