Unit at Philadelphia refinery completely destroyed in fire: sources

[June 24, 2019]  By Jarrett Renshaw and Jessica DiNapoli

(Reuters) - The alkylation unit involved in a massive fire on Friday at Philadelphia Energy Solutions Inc's oil refinery has been completely destroyed, which will hamper the supply of gasoline from the U.S. East Coast's largest refinery, sources familiar with the matter said on Sunday.

The destruction of the unit, coupled with damage from the fire that ripped through the 335,000 barrel-per-day (bpd) refining complex, could force the 200,000 bpd Girard Point section of the two-section complex to remain shut for an extended period.

Major units in the Point Breeze section of the plant were also shut down due to unrelated repairs, sources said.

Even when the Girard Point section restarts, it will run at reduced rates due to the loss of the alkylation unit, two sources told Reuters on Sunday.

It could take several years for the company to rebuild the unit.

The damage will test the resolve and the finances of the struggling refiner, which emerged from bankruptcy roughly a year ago and has embarked on a number of cash-saving measures in recent months. It will also have to contend with growing concern from the local community and public officials over whether it can safely operate amid its financial woes.

The fire, which began in a tank and involved several explosions that sent a huge fireball into the sky, engulfing the surrounding areas in smoke early on Friday morning, was extinguished Saturday afternoon, the Philadelphia Fire Department said on Sunday in a statement.

The gas valve that had been fueling the fire was shut off, and the tank involved in the blaze was isolated, the fire department said.

The department's hazmat unit and Philadelphia's department of public health are continuing to monitor the air quality around the refinery.

A source familiar with plant operations said one explosion occurred at the 30,000 bpd alkylation unit that uses hydrofluoric acid (HF), one of the deadliest chemicals in the refining business and a source of controversy for its use to make high-octane gasoline at refineries located in densely populated areas.

A massive fire burns at Philadelphia Energy Solutions Inc's oil refinery in this still image from video in Philadelphia, Pennsylvania, U.S. June 21, 2019. WCAU-TV/NBC via REUTERS

Hydrofluoric acid can form a toxic cloud at room temperature, with exposure leading to severe health problems and even death.

PES confirmed the fire at the alkylation unit has been extinguished and that the company and a third party are monitoring the air quality insider the facility each hour.

Philadelphia Deputy Fire Commissioner Craig Murphy said in a press conference on Friday that the cause of the fire was unclear.

Federal officials including the Occupational Safety and Health Administration and the U.S. Chemical Safety and Hazard Investigation Board on Monday will begin an investigation into the cause and origin of the fire, according to the fire department statement.

Four workers were injured and treated on-site, according to a company statement, while city emergency workers treated one person, who did not need to go to a hospital.

The fire comes as the company has faced financial headwinds. Philadelphia Energy Solutions emerged from bankruptcy last year, after filing because of the costs of complying with the U.S. Renewable Fuel Standard, a 2005 law that requires refiners to either blend biofuels into their product or purchase credits from competitors who do.

The refinery has been financially struggling since then, Reuters has reported.

(Reporting by Jarrett Renshaw and Jessica DiNapoli; Editing by Phil Berlowitz and Marguerita Choy)

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