Reuters: Lyondell cuts output at Houston refinery after fire

By Erwin Seba, Reuters

A fire erupted at LyondellBasell Industries' 263,776 barrels-per-day Houston refinery on Friday, forcing the company to cut output as much as 25 percent as it will take up to a month to fix a damaged coker.

A fire erupted at LyondellBasell Industries' 263,776 barrels-per-day Houston refinery on Friday, forcing the company to cut output as much as 25 percent as it will take up to a month to fix a damaged coker, sources familiar with operations told Reuters.

No injuries were reported, the Houston Fire Department said by telephone. As black smoke blanketed swaths of Houston, emergency officials urged nearby residents not to leave their homes and to turn off air conditioners to avoid inhaling the fumes in the fourth-largest U.S. city.

Television images later showed the fire having been largely extinguished.

Lyondell alerted a community hotline that the fire occurred, then later issued a statement confirming the blaze was in a coker.

Sources at the plant who are not authorized to speak publicly described the fire as "very bad" at the 42,000 barrels-per-day (bpd) delayed coker unit.

On Thursday a hydrogen compressor malfunction shut a gas oil hydrotreater at the plant. It was not clear if the events were related.

Friday's fire was the second in less than 24 hours at a major Houston-area plant. On Thursday afternoon a fire broke out at Exxon Mobil Corp's 560,500 bpd plant in Baytown, the nation's second-largest refinery. That fire caused no injuries and was extinguished within an hour.

About half of all U.S. refining capacity is in plants in Houston and along the U.S. Gulf Coast.

The U.S. gasoline crack spread, a widely used benchmark for refiner margins, extended gains Friday, rising by 2.35 percent to $21.79 per barrel in the minutes after the Reuters report of the fire at the Houston refinery. The crack spread is up roughly 5 percent on the day.

Canadian heavy crude differentials fell on Friday, with May trading at $15.05 a barrel below WTI, according to Shorcan Energy brokers, down 30 cents from Thursday's settlement. June differentials fell by 85 cents to a $14.65 a barrel discount to WTI.

Lyondell has run more Canadian crude at the plant over the last three years while reducing Venezuelan heavy oil imports.

 

Gulf Coast cash refined products markets largely shrugged off the fire. A2 CBOB gasoline differentials rose less than a penny per gallon, then retreated to Thursday's levels, while ultra-low sulfur diesel climbed 0.75 cent per gallon and stalled, traders and brokers said.

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