Sunoco refinery fire stokes U.S. gasoline price

HOUSTON, May 18 – Sunoco Inc (SUN.N) said on Monday afternoon that a gasoline-producing fluidic catalytic cracking unit at its 178,000 barrel per day (bpd) Marcus Hook, Pennsylvania, refinery was shut following Sunday night’s explosion in an ethylene unit.

The refinery’s crude distillation unit was running at 85 percent of planned production levels, said Sunoco spokesman Thomas Golembeski as refinery firefighters continued to keep contained the blaze triggered by the blast.

The Sunday night blast and fire triggered a rally in gasoline prices on Monday. Gasoline futures on the New York Mercantile Exchange RBc1 rose 7.75 cents to settle at a seven-month high of $1.7581 a gallon, while heating oil HOc1 rose 5.69 cents to $1.4757.

The crude unit’s throughput had been cut prior to Sunday’s blast, Golembeski said, as Sunoco bucked up margins in the face of motor fuel demand cut by the recession. Sunoco’s refineries’ crude units were running at an average 78 percent prior to the blast, the company had said.

Assuming Marcus Hook’s crude throughput was down by 78 percent before the blast, the refinery’s oil intake could be down by as much as one-third to about 118,000 bpd after the explosion.

Air monitors set up around the refinery continue to show no threat to human health from the substances being burned in the blaze, he said.

Investigators from Sunoco, the U.S. Occupational Safety and Health Administration and the Delaware state fire marshal have begun interviewing unit operators.

The refinery is also providing information to the U.S. Chemical Safety Board, which, in past investigations, has criticized refiners like BP Plc (BP.L) for failures in refinery safety.

“The CSB has no plans to investigate at this point, although we have been following the event,” said board spokesman Daniel Horowitz in a statement. “As you know, we generally must husband our limited resources for accidents with serious injuries, deaths, or major public impacts.”

No injuries were reported due to the explosion and fire. All Sunoco employees have been accounted for.

The blast rocked an ethylene complex in a portion of the refinery across the state border with Delaware.

“The fire is under control and is contained and I don’t know when it will be out,” Golembeski said.

The incident sparked concern that fuel supplies in the heavily populated U.S. Northeast may run tight at the start of the summer vacation season, when gasoline demand typically peaks.

Sunoco is “increasing rates on select units” at its 335,000-bpd Philadelphia and 145,000-bpd Eagle Point, New Jersey, refineries to make up for the losses at Marcus Hook, he said.

Information was not available about which units were and by how much their throughputs are going up, Golembeski said.

Firefighters from cities and counties around the refinery battled the blaze early Monday morning.

Ethylene is a by-product of refining, including the gasoline production process, and is used in making plastics, laundry detergents and other products.

The explosion occurred at 10:15 p.m. EDT Sunday (0215 Monday GMT), he said. No evacuations of surrounding communities were required.