Chevron says Richmond repair timing unknown

Tue Sep 25, 2012 12:17am EDT
 
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By Braden Reddall

RICHMOND, California (Reuters) - Chevron Corp (CVX.N: Quote) needs a few more weeks to assess damage at its plant in Richmond, California, and does not yet know how long it will need to repair its crude unit after an early August fire damaged the state's second-biggest refinery, its general manager said on Monday.

The 245,000 barrels-per-day plant, which accounts for one-eighth of California's refining capacity, has run at a "reduced" rate since the fire, and this has risen only marginally since then, General Manager Nigel Hearne said in an interview.

The lower throughput caused a jump in gasoline prices in California as traders scrambled to find alternative supplies. The crude unit shutdown has left California, which consumes more gasoline than any other U.S. state, vulnerable to price spikes when any of the state's 15 refineries have problems.

The cause of the fire is also of great concern for the people living near the refinery. While investigations are still under way, the focus has centered on a failed pipe component less than 5 feet long.

More than 200 residents gathered in a Richmond auditorium on Monday night to ask questions of the various regulatory bodies investigating the fire.

Chemical Safety Board investigator Steve Cutchen said sections of the wall of the pipe had thinned to 20 percent of its design, and called the accident a "close call" that "could have been far worse."

Chevron said this pipe had a low-silicon content, making it more susceptible to corrosion, which was understood by its technical staff but not acted upon. "Clearly it wasn't, so the question is why wasn't it," Hearne said in the interview.

PLANT STILL UNDER INVESTIGATION   Continued...