LEMONT, Illinois (Reuters) - Citgo Petroleum Corp effectively shut down its refinery near Chicago after a fire at its main crude unit, saying it did not know when operations might resume.
Benchmark gasoline futures spiked 1.5 percent after news of the Wednesday night fire at the 174,500 barrel per day (bpd) refinery in Lemont, Illinois. Citgo said it shut down the crude distillation unit, the workhorse of any refinery that processes crude oil into feedstock for other units within the plant.
"At this time we do not have a schedule on when the crude unit will again be operational," Citgo said in a statement. "The refinery operations have been significantly reduced, but we do have some downstream units still in operation."
A source familiar with the refinery's operations earlier told Reuters that the plant was "pretty much shut down," and without the crude unit Citgo is likely to quickly run out of secondary feedstock needed to run the secondary units. Industry group Genscape said two other major units were already shut.
The source said the extent of the damage to the crude unit was not known. The unit was last shut for maintenance in spring 2012, according to IIR Energy. The refinery runs mostly heavy Canadian crude, government data show.
Local emergency fire officials said the refinery's internal fire staff of over a dozen people handled most of the activity and managed to bring the fire under control within three hours. Another 50 to 60 outside firefighters assisted.
"The fire wasn't as big as it could have been," Lemont Fire Chief George Rimbo said. "We were able to control it very quickly."
They confirmed that there were no injuries or rescues. They didn't know the cause of the fire or the extent of the damage.
Steam was seen coming from the stacks of some units at the refinery on Thursday, consistent with continued operation of the downstream units. There was no smell of burning and no visible emergency vehicles. Vending trucks came and went.
Local television showed nighttime images of dark smoke emerging from the refinery, 30 miles southwest of Chicago, but no flames. The local ABC TV station quoted an unnamed refinery employee as saying a crew had been working on a valve when a crude oil leak caught fire.
"I know there was a lot of work being done at the refinery, something sparked, which caused the fire," Lemont Mayor Brian Reaves told the local NBC TV station.
Genscape later reported the 160,000 bpd CDU, the 71,000 bpd vacuum distillation unit (VDU) and a 28,000-bpd catalytic reformer had all been shut just after 8 p.m. EDT (midnight GMT).
U.S. benchmark gasoline futures prices, which had closed near their lowest since 2011 on Wednesday, jumped on Thursday, rising 1.5 percent to $2.5896 a gallon on the New York Mercantile Exchange (NYMEX).
Chicago CBOB gasoline differentials over the NYMEX contract also jumped 10 cents a gallon on news of the fire. The refinery has the capacity to produce 4 million gallons per day (95,000 bpd) of gasoline, according to its website.
Units that are downstream of the main crude distillation unit (CDU) need to use feedstock that is on hand in the refinery or in storage tanks. Without the CDU, the stored inventories will run out and the refinery will either stop operations altogether or can choose to buy feedstock from the market.
A 2012 crude unit fire at Chevron Corp's (CVX.N) Richmond, California, refinery shut the CDU for several months and cut gasoline production by at least 50 percent.
Even though the refinery is not the largest in the region, wholesale Chicago gasoline prices are spiking, said Patrick DeHaan, senior petroleum analyst at GasBuddy, a website that monitors gasoline prices across the country.
"It wouldn't surprise me if Chicago rallied for a few days. We need to hear from Citgo the extent of damage - that will have an effect on how long prices will rally," DeHaan said.
But, he said, drivers may not feel a significant impact in the near term because Chicago gasoline prices have been tumbling in the past week, with inventories on the rise and no serious refinery issues until now.
Chicago CBOB gasoline differentials were indicated 17.00/12.00 cents under November RBOB gasoline futures, while ultra-low sulfur diesel rose 4.50 cents a gallon to 5.00/3.00 cents under November heating oil futures, traders said.
In the neighboring Group Three market, covering some Midwestern states, gasoline differentials rose 4.50 cents to 20.50/19.50 cents under the RBOB futures and ULSD rose 2.50 cents to 6.50/5.50 cents under heating oil futures.
Gulf Coast gasoline differentials rose by over 2 cents a gallon in anticipation of rising demand from the Chicago area.
The shutdown may also contribute to a slump in cash crude markets due to weak demand from refiners that shut for routine maintenance in the autumn. One cash crude trader said it was too soon to tell what impact the fire will have. The refinery runs on a diet of almost exclusively Canadian crude.
(For refinery outages in the Reuters Oil FundamentalsDatabase see here or go to)
Additional reporting by Erwin Seba and Kristen Hays in Houston, Sabina Zawadzki and Jeanine Prezioso in New York, Nia Williams in Calgary and Koustav Samanta in Bangalore; Writing by Sabina Zawadzki; Editing by Gopakumar Warrier, Jeffrey Benkoe, John Wallace, Alden Bentley and Phil Berlowitz