* Chemical reaction weakened steel, led to blast
* Company revising inspection procedures
* Other investigations ongoing
(Adds detail, background, adds byline)
By Kristen Hays
HOUSTON, July 21 Damage to a heat exchanger that couldn't be seen by the naked eye caused an explosion that killed seven workers at a Washington state refinery last year, an investigation by workers and Tesoro Corp (TSO.N) showed.
The final report of a joint investigation by the company and the local chapter of the United Steelworkers union released late Thursday said the blast at the 120,000 barrel-per-day (bpd) refinery in Anacortes, Washington, stemmed from a chemical reaction involving steel exposed to atomic hydrogen at high temperatures and pressures.
That reaction, called "high temperature hydrogen attack," or HTHA, allows cracks to form and weakens the steel. The damaged heat exchanger in a naphtha hydrotreater subsequently could not handle operating pressures and exploded, the report said.
Tesoro shut the plant for nearly six months after the April 2010 explosion, which was the worst refinery disaster since a 2005 explosion killed 15 workers at BP Plc's (BP.L) (BP.N) 437,080-bpd refinery in Texas City, Texas.
Tesoro is appealing a $2.4 million fine and 44 violations levied against the company for the blast by Washington state's Department of Labor & Industries.
The state regulator issued the fine and violations last October after a six-month investigation found that the explosion could have been prevented by proper inspection and maintenance of the heat exchanger. The regulator said it had not been properly inspected in 12 years.
Tesoro said on Thursday that the HTHA damage was visible in highly magnified samples of the steel, but such a specialized inspection was not done before the blast.
"Corrosion experts did not recommend the failed exchanger for an HTHA inspection in any of the five corrosion reviews conducted between 1990 and 2008," the company said in a statement.
Tesoro spokesman Mike Marcy declined comment on the appeal, citing company policy against discussing pending litigation.
Tesoro said it is building new heat exchangers designed to minimize HTHA risk. The company also said it now surpasses industry standards for determining what equipment needs HTHA testing and has a new plan for enhanced corrosion reviews.
The U.S. Chemical Safety Board is investigating the explosion, as is the criminal division of the U.S. Environmental Protection Agency.
Tesoro has cooperated with the investigations, and said it provided copies of Thursday's report to those agencies.
(Editing by Lisa Shumaker)