Valero Energy Corp. Has Fire at Port Arthur Refinery (Update4)
bloomberg.com
By Robert Tuttle and Victor Epstein
Nov. 8 (Bloomberg) -- Valero Energy Corp., the biggest U.S. refiner, reported a fire at the company's largest plant in Port Arthur, Texas, after a power disruption early today.
The three-alarm blaze broke out at 7 a.m., local time, in a heater at a distillate hydrotreating unit, Bill Day, a company spokesman, said in an e-mail. The fire was ``quickly'' contained, Day said. The refinery is capable of processing 325,000 barrels of oil a day, according to Valero.
The unit affected by the fire, one of two distillate hydrotreaters at the plant, was shut, Day said. ``Most process units are in operation,'' he said.
Bill Klesse, chief executive officer of Valero, cited problems at the Port Arthur plant during a conference call with investors and analysts Nov. 6 after the refiner reported a 21 percent decline in third-quarter profit from a year ago.
The drop was partly due to $300 million in lost opportunity costs, such as unplanned plant shutdowns and the missed fuel sales they caused, in the third quarter. Valero had $1.15 billion in lost opportunity costs the first nine months of this year.
The refinery is operating at 60 percent capacity because of the fire, the Beaumont Enterprise reported without citing a source for the information. Day did not comment on the newspaper report. He said the plant was operating at ``somewhat reduced'' processing rates before the fire because of problems transporting petroleum coke to the port.
After today's fire, all employees were accounted for and there were no reports of employee injuries, Day said. There are ``reports'' one contractor was taken to a hospital because of ``anxiety,'' he said.
Cause Under Investigation
The cause of the fire is under investigation, Day said.
The blaze is at least the 31st incident so far this year at the Port Arthur plant and the second fire, according to state filings. A fire in a naphtha unit happened on Aug. 5. A leaking storage tank hospitalized 39 people on July 28.
The plant was shut down Jan. 16 by a power outage. Problems in the coker unit, which included coke drum cracking, reduced output from Aug. 16 through at least Sept. 6.
Hurricane Humberto
The entire complex was shut for several days after Hurricane Humberto swept through Southwest Texas on Sept. 13, and full production was not restored until Oct. 19.
Valero is developing plans for a $1.75 billion expansion of the Port Arthur refinery through 2011 that will increase its daily processing capacity by 75,000 barrels of feedstock to 400,000 barrels.
The project includes a new delayed coker capable of processing 45,000 barrels per day and a new hydrocracker. The plant's existing coker can handle 105,000 barrels daily.
Klesse is trying to derive $1 billion in savings by raising the reliability of Valero's plants from the third quartile of the bi-annual Solomon Survey of U.S. refineries to the first. Solomon Survey is a private ranking of refinery reliability.
Valero shares fell 1 cent to $70.66 in composite trading on the New York Stock Exchange at 11:45 a.m. The shares have risen 38 percent this year.
To contact the reporter on this story: Robert Tuttle in New York at rtuttle@bloomberg.net ; Victor Epstein in Houston at vepstein@bloomberg.net .
Last Updated: November 8, 2007 12:26 EST |
