LEMONT, Ailing., Oct 24 (Reuters) – Citgo Petroleum Corp effectively shut down its refinery near Chicago after a fire at its foremost crude unit, saying it did not know when operations might resume.
Benchmark gasoline futures spiked 1.5 percent after information of the Wednesday evening fireplace at the 174,500 barrel per day (bpd) refinery in Lemont, Illinois. Citgo mentioned it shut down the crude distillation unit, the workhorse of any refinery that processes crude oil into feedstock for different units throughout the plant.
“Presently we do not have a schedule on when the crude unit will once more be operational,” Citgo mentioned in a statement. “The refinery operations have been significantly decreased, however we do have some downstream items nonetheless in operation.”
A supply aware of the refinery’s operations earlier instructed Reuters that the plant was “just about shut down,” and with out the crude unit Citgo is prone to shortly run out of secondary feedstock needed to run the secondary items. Business group Genscape mentioned two other main models have been already shut.
The supply mentioned the extent of the damage to the crude unit was not identified. The unit was final shut for maintenance in spring 2012, in response to IIR Vitality. The refinery runs mostly heavy Canadian crude, government knowledge show.
Local emergency hearth officials mentioned the refinery’s internal hearth staff of over a dozen folks dealt with most of the exercise and managed to deliver the fireplace underneath control inside three hours. One other 50 to 60 outdoors firefighters assisted.
“The hearth wasn’t as big as it might have been,” Lemont Fireplace Chief George Rimbo said. “We have been able to regulate it very quickly.”
They confirmed that there were no accidents or rescues. They didn’t know the reason for the fire or the extent of the damage.
Steam was seen coming from the stacks of some items on the refinery on Thursday, in line with continued operation of the downstream models. There was no scent of burning and no visible emergency automobiles. Vending trucks got here and went.
Local television confirmed nighttime photos of dark smoke emerging from the refinery, 30 miles southwest of Chicago, but no flames. The local ABC Television station quoted an unnamed refinery worker as saying a crew had been working on a valve when a crude oil leak caught fireplace.
“I do know there was quite a bit of labor being done at the refinery, something sparked, which brought about the fireplace,” Lemont Mayor Brian Reaves instructed the local NBC Television 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 simply after eight 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 brand new York Mercantile Alternate (NYMEX).
Chicago CBOB gasoline differentials over the NYMEX contract additionally jumped 10 cents a gallon on news of the fireplace. The refinery has the capacity to supply 4 million gallons per day (ninety five,000 bpd) of gasoline, in keeping with its webpage.
Items which are downstream of the main crude distillation unit (CDU) want to use feedstock that is on hand within the refinery or in storage tanks. Without the CDU, the stored inventories will run out and the refinery will either cease operations altogether or can select to buy feedstock from the market.
A 2012 crude unit hearth at Chevron Corp’s Richmond, California, refinery shut the CDU for several months and reduce gasoline manufacturing by no less than 50 %.
Despite the fact that the refinery just isn’t the largest within the region, wholesale Chicago gasoline prices are spiking, stated Patrick DeHaan, senior petroleum analyst at GasBuddy, a web site that displays gasoline costs across the nation.
“It wouldn’t shock me if Chicago rallied for a few days. We want to listen to from Citgo the extent of harm – that may affect how long costs will rally,” DeHaan stated.
However, he stated, drivers may not really feel a major affect in the near time period as a result of Chicago gasoline costs have been tumbling previously week, with inventories on the rise and no critical refinery issues till now.
Chicago CBOB gasoline differentials had been indicated 17.00/12.00 cents under November RBOB gasoline futures, while extremely-low sulfur diesel rose 4.50 cents a gallon to 5.00/three.00 cents beneath November heating oil futures, traders said.
Within the neighboring Group Three market, protecting 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 six.50/5.50 cents underneath 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 droop in money crude markets attributable to weak demand from refiners that shut for routine upkeep within the autumn. One cash crude trader stated it was too soon to tell what impact the hearth could have. The refinery runs on a diet of almost solely Canadian crude.
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