September 28, 2011 / 1:00 PM / 7 years ago

Shell shuts some Singapore refinery units after fire

SINGAPORE (Reuters) - A fire that forced Royal Dutch Shell to shut down some units and evacuate non-essential staff at its massive Singapore refinery on Wednesday has been contained after burning for nearly half a day.

Smoke and flames engulf the Royal Dutch Shell's Pulau Bukom offshore petroleum complex in Singapore September 28, 2011. A fire at Royal Dutch Shell's petroleum complex offshore Singapore has intensified, a senior company official said. REUTERS/Edgar Su

The fire hit the 500,000 barrel per day (bpd) plant, Shell’s biggest worldwide, at 1:15 p.m local time (0515 GMT), forcing it to close down a hydrocracking unit that helps make diesel fuel as a safety measure, the company said earlier.

In an update at 12:15 a.m. on Thursday (1615 GMT Wednesday), Shell said the fire was contained and that no one was seriously hurt by the blaze, but that it had shut “neighboring units” as a precaution. It said the fire had damaged the pump room, which contains pipes used for blending refined fuels.

Crude processing units at the plant, which accounts for more than a third of the island nation’s total refining capacity, were running at reduced capacity, Lee Tzu Yang, chairman for Shell Companies in Singapore, told reporters.

“All the crude distillation units, all the processing units are running at the moment in a stable situation,” said Martijn van Koten, vice president for manufacturing operations at a media briefing.

“The hydrocracker itself is not affected. We have just taken a precautionary measure just to make sure that it is in a safe position,” he added.

Singapore is the world’s biggest market for fuel oil and Asia’s hub for crude and product trading. Any disruption there may have an impact on regional prices out of proportion to the capacity taken offline.

“The FCCU (gasoline-making unit), on another island further back, is also running in a stable position,” van Koten said. “Our priority is not to keep everything running. Our priority is to focus on (making sure) everyone is safe and to make sure that the fire doesn’t spread.”

Shell will continue to supply Singapore’s fuel markets with products from storage and other refineries, so the company expects no shortages in the market, Lee said.

The company has evacuated nonessential staff from the refining complex, he added.


Refinery sources said the fire occurred where finished oil products are transferred from the final production unit into storage tanks by being pumped through pipelines.

“There are a lot of pipelines in this area. And there are residues of flammable oil trapped in them,” said one of the refinery sources.

Shell is operating its ethylene cracker normally at the plant. The ethylene cracker is typically fed by products from the hydrocracking unit that was shut due to the fire. The company is supplying alternative feedstocks to the ethylene cracker to keep it running, van Koten said.

Shell, one of the largest naphtha traders and suppliers in Asia, sold an unusually heavy volume of at least 40,000 tonnes of prompt October/November naphtha swaps, traders said.

Some traders view Shell’s move to sell an unusually-high volume of naphtha’s October/November swaps, at higher price levels of $4.75-$5.00 a tonne versus week-ago levels, as a move to lock in higher profit levels for the inventories.

Additional reporting by Alejandro Barbajosa, Yaw Yan Chong and Luke Pachymuthu, and Naveen Arul in Bangalore, Writing by Manash Goswami; Editing by Jane Biard and Marguerita Choy

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