Massive Explosions Rock Philadelphia Refinery

FILE PHOTO: The Philadelphia Energy Solutions oil refinery is seen at sunset in front of the Philadelphia skyline
FILE PHOTO: The Philadelphia Energy Solutions oil refinery in front of the Philadelphia skyline. Picture taken March 24, 2014. REUTERS/David M. Parrott/File Photo

reuters logo By Jarrett Renshaw PHILADELPHIA, June 21 (Reuters) – Firefighters were working to bring under control a massive fire at Philadelphia Energy Solutions Inc’s refinery on Friday that has resulted in damage that could keep the affected unit shut for an extended period, according to Philadelphia city officials and company sources.

Philadelphia fire officials said several explosions sent a massive fireball into the sky, engulfing the surrounding areas in smoke after 4 a.m. EDT (0800 GMT), following the ignition of a fire that started in a butane vat at the 335,000 barrel-per-day (bpd) refining complex, the largest and oldest on the U.S. East Coast; there has been a plant on the site since 1870.

There were four injuries reported, according to a company statement, and all workers were treated on-site. The extent of the damage is unknown, but appears to be more serious than a previous fire less than two weeks ago in a different unit at the complex.

A veteran refinery worker who was at the plant when the fire broke out said, “It was the worst I’ve ever experienced,” he said. “It looked like a nuclear bomb went off. I thought we were all going to die.”

City health officials said there is no immediate danger to the surrounding community, and said there is no need to evacuate or shelter-in-place.

PES said in a statement that there were three explosions at the refinery, which affected an alkylation unit, they said. PES said they believe the product that was burning was “mostly propane.”

The complex is still running at a reduced rate, PES said in a statement.

A source familiar with plant operations said one explosion occurred at a 30,000 bpd alkylation unit that uses hydrofluoric acid, one of the deadliest chemicals in the refining business and a source of controversy.

In the past, refinery workers have called for refineries to stop using hydrofluoric acid in refining due to the harm it can do to the eyes, skin and lungs when released into the atmosphere following explosions.

Preliminary testing at the refinery and the adjacent community shows no “ambient carbon monoxide, hydrocarbons (combustibles), or hydrogen sulfide,” said Philadelphia Department of Public Health spokesman James Garrow in a statement.

Pennsylvania’s Department of Environmental Protection, similarly, said back-up support is not currently needed as air quality is not hazardous.

The incident comes after years of financial struggles for the refinery, slashing worker benefits and scaling back capital projects to save cash, and went through a bankruptcy process last year to reduce its debt.

However, the company emerged from bankruptcy in 2018 with $148 million in cash, only to see that fall to $87.7 million just three months later.

Depending on the extent of the damage, there will be questions as to whether the company has enough money to rebuild. It comes just after a June 10 fire at the same refinery, which according to a source familiar with operations, affected a 50,000 bpd catalytic cracking unit.

That cracker, which is in the Point Breeze section of the refinery, remains shut. It was expected to restart this week but ran into issues, according to a source familiar with plant operations.

News of the explosion caused gasoline futures traded on NYMEX to spike 3.2%.

Analysts said gasoline supply in the Northeast could be affected due to the outage.

The region already experiences high retail gasoline costs, and is likely to boost fuel imports from Europe and “likely to result in a short-term spike” in East Coast gasoline prices, analysts at FGE Energy said in a note. (Reporting by Jarrett Renshaw in Philadelphia; Nallur Sethuraman and Arpan Varghese in Bengaluru; additional reporting by Rich McKay in Atlanta, Erwin Seba in Houston, Jessica Resnick Ault and Peter Szekely in New York and Eileen Soreng in Bengaluru; Editing by Marguerita Choy and Steve Orlofsky)

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