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U.S. looking for possible links in BP blasts

July 29, 2005

HOUSTON (Reuters) – U.S. government investigators began on
Friday searching for possible links between a Thursday night
explosion at BP Plc.’s Texas City, Texas, refinery and a deadly
March 23 blast, said the head of the U.S. Chemical Safety and
Hazard Investigation Board.

Two board investigators were expected to enter the residue
hydrotreater where the Thursday explosion cut crude oil
processing at the 460,000 barrel per day (bpd) capacity
refinery by 70,000 bpd and gasoline output by 35,000 bpd.

No one was injured in Thursday’s blast, unlike the March
explosion which killed 15 workers and injured 170 other people,
the deadliest refinery accident in 15 years.

The Thursday night blast fed NYMEX traders’ fears on Friday
about U.S. refined products supply and pushed crude oil prices
up 63 cents to $60.57 a barrel.

The Chemical Safety Board investigators will be “looking
for similar circumstances” between the March 23 blast in an
octane-enhancing unit and the hydrotreater explosion, said
Carolyn Merit, chair and chief executive of the Chemical Safety
Board.

“We know these are different units,” Merit said. “But we’ll
be trying to identify a common link between these two events,”
Merit said in a phone interview.

Merit expects a decision about combining the investigations
to come next week. The board could also decide to keep the
probes separate or that the investigation should be done by the
U.S. Occupational Safety and Health Administration, which is
already examining the March and Thursday incidents.

DISPUTE CONTINUES

BP has said the March 23 blast was due to failures by
employees to follow correct procedures and the United
Steelworkers, which represents refinery workers, said the blast
was due to design failures and refinery managers breaking
company rules.

The Steelworkers renewed their criticisms on Friday.

USW President Leo Gerard said in a statement the Thursday
blast “raises grave doubts about the company’s commitment to
taking the urgent steps necessary to make the refinery safer
for our members and the Texas City community .”

A BP spokesman declined to discuss Gerard’s statement.

“What we want to focus on is what we are doing and we don’t
want to get into a public debate,” said BP’s Hugh Depland.

The Texas City refinery, which is the third-largest in the
United States, on Friday was in a “safety stand down” in which
all refinery personnel take a break from normal duties to
attend meetings on safety procedures, Depland said.

There was a similar stand down at the refinery after the
March explosion.

COMPANY’S FOCUS

“We don’t know what caused this incident,” Depland said.
“What we’re focusing on is getting (any problems) taken care of
and finding out what caused it.”

Early on Friday, the refinery used its safety flare to vent
emissions from the sulphur recovery unit, which lost part of
its sulfur supply after the hydrotreater went down. The SRU was
operating normally later in the day.

A residual hydrotreater uses hydrogen under high heat and
pressure to remove sulfur and convert the heavy, gunky “bottom”
of a crude oil barrel to material that can be refined into
gasoline and diesel.

BP was unable to estimate when the plant’s 60,000 bpd in
hydrotreating capacity would come back on line. In addition to
the unit hit by the explosion, two other hydrotreaters were
shut as a safety precaution.

State and federal pollution regulators, which will also be
probing the incident for possible rules violations, said on
Friday there were no traces of potentially harmful material in
the smoke from the overnight fire, which burned for nine hours.

The March 23 blast had a minimal impact on production, but
forced BP, the world’s second-largest oil company by market
capitalization, to take a $700 million charge on its
second-quarter earnings for lawsuits by survivors and the
injured.




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