Bukom fire extinguished

Damage forces Royal Dutch Shell to shut down its largest refinery
Leong Wee Keat Today Online 30 Sep 11;

SINGAPORE - The "erratic" fire that had plagued Royal Dutch Shell's 500,000-barrels-a-day refinery at Pulau Bukom for days was extinguished last night at around 11.30pm, more than 34 hours after the blaze begun on Wednesday afternoon.

While the company confirmed there were no more leaks, the Singapore Civil Defence Force (SCDF) remained on standby last night as there were traces of vapour in the area.

The damage had been done: Shell has been forced to begin shutting down the refinery, its largest worldwide.

In a statement issued after the fire was put out, a Shell spokesperson said the company will continue to monitor the air quality at Pulau Bukom.

The spokesperson added: "Safety is our top priority. We are prepared to shut down all refinery units if this is considered necessary from a safety perspective, with the exception of utilities."

At a press conference held hours before the fire was put out, Shell vice-president of manufacturing operations Martijn Van Koten said the company was "going through the progressive shutdown of the refinery".

The company has shut several units in the vicinity of the fire, including a hydrocracker. A full shutdown will take two days.

According to Shell's preliminary investigation, the fire could have started during maintenance work but the company was unable to provide further details.

Hundreds of firefighters had worked round the clock to contain the fire and attempt to put it out: SCDF deployed more than 100 firefighters and 34 fire-fighting apparatus, as well as cooling jets to protect nearby tanks from the radiant heat.

Singapore Armed Forces (SAF) troops also joined SCDF and police officers in setting up command posts at the Pasir Panjang Ferry Terminal. SAF assets on standby include a Super Puma helicopter and three navy fast crafts.

The Shell spokesperson explained that the affected area "has lengths of pipelines and connected pumps, and holds a mix of hydrocarbons".

The spokesperson added: "This was the reason for the erratic fire, sometimes waning and sometimes growing."

Explosions were heard at the refinery around noon yesterday and witnesses at the Pasir Panjang port and West Coast area said they saw more black smoke and fireballs shooting into the sky. "The fireball was 10, 20 metres in height," eyewitness Ben Koh told MediaCorp.

The National Environment Agency (NEA) said the hazy skies yesterday were not linked to the fire at the refinery.

The three-hour PSI reading reached as high as 69 - considered within the "moderate" range - at 6pm yesterday.

On its website, NEA attributed this to smoke haze "being brought over from the fires in South Sumatra by the prevailing south or south-east winds".

Adding that it "has not detected the presence of any toxic gases on the mainland", NEA said: "Based on the prevailing wind conditions, slight haze can be expected over the next one to two days if the fires over southern Sumatra persist."

No further injuries were reported yesterday, and Shell said its six firefighters - who had suffered minor injuries - have returned to normal duties after receiving medical attention.

Purvin & Gertz managing consultant Victor Shum noted that, in July, a fire at Formosa Petrochemical Refinery in Taiwan had caused the facility to shut down for an extended period. It only started resuming operations this month, he added.

With more than 90 per cent of the refinery's output exported to markets in the region, Asian traders are expecting output to fall sharply.

Speaking before the fire was extinguished, Shell Singapore chairman Lee Tzu Yang said: "I'm sure there will be a loss in dollar terms, which we will all regret, but that is not our priority at this time. Our priority at this time is to deal with the fire."

Fire at Pulau Bukom oil refinery extinguished
Channel NewsAsia 30 September 2011 0032 hrs

SINGAPORE: The fire at Pulau Bukom refinery has been extinguished, according to the Singapore Civil Defence Force (SCDF) and oil company Shell.

However, there are traces of fuel vapour, and firefighters are on stand-by to handle that or any other leaks.

SCDF said 34 of its vehicles and about 100 firefighters are currently at the scene.

Shell said its global fire consultants are also on-site to provide inputs to the team.

Shell's in-house global fire expert will also be in Singapore from Friday to provide assistance.

It said safety is a top priority and the company is prepared to shut down all refinery units, if necessary.

Other precautionary measures already taken include the monitoring of the air quality around Pulau Bukom four times a day, shutting down neighbouring units within the vicinity of the fire, and isolating the lines and cooling the tanks in the area to prevent entry of any fresh hydrocarbons.

The company said the affected area had lengths of pipelines and connected pumps, and holds a mix of hydrocarbons.

This was the reason for the erratic fire, sometimes waning and sometimes growing.

The smoke observed is from hydrocarbons not fully combusted.

Shell said its website will be regularly updated with the latest information whenever available.

- CNA/de

Shell may shut entire refinery at Pulau Bukom
Channel NewsAsia 29 September 2011 2041 hrs

SINGAPORE: As the fire at Shell's Pulau Bukom refinery continues, the company says it will shut down the whole facility if that's what it takes to put out the blaze completely.

A full shutdown will take two days.

The company has shut several units in the vicinity of the fire at the 500,000-barrels-a-day refinery including a hydrocracker, Shell said earlier.

Speaking at a media conference on Thursday evening, Shell Singapore chairman Lee Tzu Yang said they are working to identify the source that is still feeding the fire which broke out on Wednesday afternoon.

The fire is confined to a pump house and a complex interconnected system of pipelines. The pipes are no longer in use but still contain fuel, which causes flares when the pipes open up under fire.

Shell Vice-President of Manufacturing Operations East, Martijn van Koten, said the fire is likely related to maintenance work that was being carried out at the time.

However, he declined to give details saying this would be pure speculation.

Shell said investigations will be carried out after the fire is put out, which remains its firm priority.

Mr van Koten said the strategy is to starve the fire and contain it in an area where it can be put out.

Fresh explosions were heard at the refinery around noon on Thursday.

Witnesses at the Pasir Panjang port and at West Coast said they saw more black smoke and fireballs shooting into the sky.

Ben Koh, an eyewitness at Pasir Panjang port, said: "The fireball was 10, 20 metres in height. After that I can see small flames, but ... from a small portion of the island."

He said the smoke got thicker, with the smell of petrol in the air. "It's not really that strong, but you can smell it," he added.

Shell said in a statement that it experienced a surge in the fire at the refinery around noon, but the fire remains contained.

It said the surge in the fire was caused by the remnants of light fuel components where the fire started.

The company said the smoke that several callers to the Channel NewsAsia news hotline said they saw was from hydrocarbons that are not fully combusted.

Shell said it is working closely with the SCDF, and its global fire consultants are also on site to provide input to the team.

In a separate statement earlier Thursday, the Singapore Civil Defence Force (SCDF) said fire fighting operations are still underway, but the fire is contained within the bund wall.

SCDF said about 20 water jets are being used to carry out boundary cooling operations to prevent heat exposure to the nearby storage tanks.

Two SCDF fire engines were badly damaged by the fire and one fire engine sustained partial damage.

SCDF said early Thursday that it has about 100 fire fighters fighting the fire with six fire engines and 13 support vehicles.

About 250 essential Shell personnel are also on Pulau Bukom helping with the operations.

The company also said that the six Shell firefighters injured while fighting the initial outbreak have gone back to their normal duties following medical attention.

- CNA/cc/al/sf/ir

Shell begins shutdown
Oil giant takes precautionary action; declares erratic blaze extinguished
Leonard Lim, Amanda Tan & Jennani Durai Straits Times 30 Sep 11;

OIL giant Shell said that the fire at its refinery on Pulau Bukom was finally put out last night, ending a 35-hour drama of firefighters battling flames that would sometimes recede, only to return as fireballs.

In a statement sent out at 11.45pm, it said that the fire 'has been extinguished' but that there were still 'traces of fuel vapour'.

Shell is standing by with the Singapore Civil Defence Force (SCDF) to monitor the situation.

'We have this problem... and we really want to fix it.'

Mr Lee Tzu Yang, chairman of Shell Companies in Singapore

At a press conference earlier at 7pm, Shell executives said that it had started a 'progressive shutdown' of the whole refinery, a process that will take two days.

In its midnight statement about the fire being put out, it said that it was 'prepared to shut down all refinery units if this is considered necessary from a safety perspective, with the exception of utilities'.

Thirteen fire engines, 21 support vehicles, and about 100 firefighters remained on Bukom, said the Singapore Civil Defence Force, which said that 'SCDF's resources are still on standby while Shell confirms that there are no more leaks'.

The Straits Times understands that flames were no longer visible at about 10pm, and the mood lifted among firefighters as the possibility of finally beating the blaze looked encouraging.

The cause of the fire - which began at 1.15pm on Wednesday in an area of crisscrossing and interconnecting pipes containing fuel compounds - has not been established.

Shell vice-president (manufacturing operations - east) Martijn van Koten said it could have started during maintenance work, but that going into any more details would be pure speculation.

Question marks remain over whether Shell's decision to shut down the plant progressively - to help pin down the source of the blaze - can now be reversed.

Shell's refinery - where crude oil is shipped in and then refined and distilled into petrochemicals like jet fuel - is its largest in the world, processing 500,000 barrels a day.

Ninety per cent of the products are exported to the Asia-Pacific region and beyond. But the company refused to speculate on how the fire could affect supply or the monetary loss it was facing.

Still, the news late last night was a welcome relief, with Shell and SCDF calling the fire 'erratic', 'complex' and 'unique' at the 7pm press conference.

'What we are encountering is multiple spots of fire, coming from exposed pipelines that had ruptured. This can be quite erratic,' said SCDF assistant commissioner Eric Yap.

Indeed, even after a fresh shift of firefighters replaced the initial 100 at 8am yesterday, three more fire engines and a support vehicle were sent to Pulau Bukom at 2pm.

For while the fire was contained within a 150m by 50m space, its unpredictable nature badly damaged two fire engines and caused partial damage to one.

No further injuries, however, have been reported apart from the superficial wounds to six Shell firefighters involved in initial efforts when the fire started.

They have recovered and returned to work, the company said yesterday.

A Singapore Armed Forces signals vehicle also arrived in the mid-afternoon at Pasir Panjang Ferry Terminal, joining others from the police and the SCDF.

The Defence Ministry said SAF troops, including those from the 2nd People's Defence Force (2 PDF), were on standby.

Firefighters had succeeded in dousing much of the flames yesterday morning, but a sudden surge of oil components from a pipe fed the blaze and reversed their efforts.

Around noon, two hours after Shell said the fire was 'significantly reduced', explosions were heard in the Pasir Panjang area and plumes of black smoke wafted into the sky.

Workers on Pulau Bukom reported seeing a fireball and flames that reached 20m upwards.

The situation had improved about an hour later, but by then hundreds of workers who had reported for work at dawn were told to take the ferry back to the mainland.

Many were glued to their mobile phones as they arrived in Singapore after the 15-minute journey, reporting to loved ones that they were safe.

But despite the uncertainty as to whether they could return to the $4.1 billion Shell Eastern Petrochemicals Complex, hundreds turned up at the Pasir Panjang Ferry Terminal at about 6am yesterday to catch their regular ferry and report to work.

Mr Suresh Kumar, 38, said he had been working when he heard the smoke alarm go off on Wednesday.

'Then I saw fire that rose up three or four metres, and we all ran to the canteen to seek safety,' the Malaysian said.

There were some who had not heeded the alarm. Indian national Poon Kundran, 43, said some thought it was a drill as staff were used to an alarm test on Wednesdays around the same time.

He was among the last to be evacuated following the fire's surge at noon yesterday.

At the ferry terminal, supervisors gathered their employees and did a headcount, before busing them off to other places such as company headquarters or dormitories.

While most workers were calm - some even whipped out camera phones and stood alongside press photographers, snapping pictures of the smoke from the pier - some recognised the possibility that their lives might have been in danger.

'I heard about three explosions. I was scared and the flames shot up quite high. The whole place is oil, jet fuel. It can easily explode,' said Filipino Peter Taton, 27.

One Indian national, Mr Selvam, 27, who has lived in a residential area on Bukom for two years, spent Wednesday night tossing and turning in his bed due to fear.

He could not sleep, though his bunk is not located near the fire.

The safety of his staff was a topic that the chairman of Shell Companies in Singapore, Mr Lee Tzu Yang, stressed repeatedly at the start of yesterday's press conference.

Calling the fire 'extremely troubling', he added: 'We have this problem... and we really want to fix it.'

His hopes came to pass a few hours later.

Water being used to fight fire
It will be used till source of fire can be detected, but foam being put on standby: SCDF
Lin Wenjian & Jermyn Chow Straits Times 30 Sep 11;

WATER was being used to fight the fire that broke out at Shell's Pulau Bukom refinery, although foam was being put on standby, said the Singapore Civil Defence Force (SCDF) last night.

At a press conference, SCDF assistant commissioner Eric Yap said that water was being used until the source of the fire could be detected.

'Water is effective at this point in time to contain the fire within the bund area of the pump house,' he said.

'We will change our strategy the moment we are able to identify what is feeding the fire. We could use the option of foam if it is effective for that type of product that is on fire,' he said.

Shell Singapore chairman Lee Tzu Yang said Shell and SCDF were ready to tackle the fire because they had prepared materials and equipment from its own resources as well as that of the industry. 'Under our arrangements with our fellow industry players, we actually have had their support in terms of provision of tenders and foam and so on. So we are ready to act once we identify where it is that we need to apply,' he said.

The SCDF had responded to a call about the fire in Pulau Bukom - which is located 5km to the southwest of Singapore - at 1.18pm on Wednesday.

About 100 of its firefighters battled the blaze on Wednesday together with those from Shell's firefighting team. A new team of SCDF firefighters took their place yesterday. It is understood that at least four firefighters based in nearby Jurong Island were also brought in to help.

Explaining how the SCDF was fighting the blaze which was contained in an area about 150m by 50m, AC Yap said his officers had subdivided the area into small sectors, and had water jets trained on them: 'Each of the sector has some spots of fire.'

Of the efforts so far, he said: 'What is important for the moment given the erratic nature and the fact that there is a source feeding the fire, is to work with Shell to find out what's feeding the fire and to curtail the source of the heat so the fire can be effectively stopped.'

He added that it was 'encouraging' that the fire had been kept from the start to the pump house, which is confined in a bund.

Fire safety experts told The Straits Times petrochemical fires are usually put out using foam.

Former SCDF deputy commissioner Tan Jin Thong, 72, said using water to fight a petrochemical fire could result in a 'boil-over situation'.

'This means there will be an explosion,' he said.

'Water gets into the oil, and because water is heavier than oil, it sinks down. When the water turns into hot steam, it may blow out,' he said.

Other industry sources said a 'foam-water solution' to 'suffocate' the fire was one of the best options. They noted that fighting a petrochemical fire was a very tedious process, but pouring a foam-water solution over the fire to prevent oxygen from reaching it was the most reliable way to put it out.

Mr Tan, who was in the fire service for 37 years before retiring in 1999, said that water can, however, be used to create 'water curtains' to cool the surroundings and prevent the fire from spreading.

The experts said that a fire like that at Bukom would take a while to die down completely. This is because fluids in the pipes that are burning could continue to reach boiling point and vaporise. The vapours could then heat up and re-ignite again.

They noted that if the pipes have burst, fuel could still leak out and it would be too dangerous for anyone to fix the pipes. The only solution? To wait for the fuel to burn itself out.

In 1988, a blaze broke out at a refinery owned by the Singapore Refining Company on Pulau Merlimau after a naptha tank caught fire. It was the biggest offshore fire in Singapore's history. More than 500 firefighters were deployed to battle the flames before it was finally put out after six days.

No toxic gases detected in air samples, says NEA
Feng Zengkun Straits Times 30 Sep 11;

WHEN sales executive Dias Cao woke up yesterday morning, he could not see beyond 100m when he looked outside the window of his 22nd-floor Clementi apartment.

'When I read about the fire in Pulau Bukom, I thought that could be part of the reason,' said Mr Cao, 28.

A fire broke out at oil giant Shell's refinery - its largest in the world - on the island on Wednesday.

Residents in Pasir Panjang, near Pulau Bukom, told The Straits Times that they noticed grey skies and an acrid smell in the air yesterday morning.

'There's been a slight haze for the past few days, so I thought it was the fires in Indonesia becoming worse,' said businessman Darren Neo, 29.

He said he realised there was a fire on Pulau Bukom after reading the newspapers.

'Maybe that could have been why the haze worsened so suddenly,' he said.

Late last night, the Singapore Civil Defence Force said the fire had been extinguished, adding, however, that were still traces of fuel vapour in the area.

The National Environment Agency (NEA) said smoke from the Pulau Bukom fire may have some effect on the air quality in western parts of Singapore - such as Jurong, Teban Gardens, West Coast and Pasir Panjang.

The NEA, which has collected air samples, said it has not detected the presence of toxic gases.

Shell said yesterday that the black smoke from the fires does not include toxic gases. It is monitoring the air quality on Pulau Bukom four times a day, and the readings have been within safety standards.

Scientists told The Straits Times that any health risk to people here depended on the nature of the fires.

'The longer the fires burn, the more likely it is that harmful gases may be released,' said Dr Fei Duan, an assistant professor in the division of thermal and fluids engineering at Nanyang Technological University.

He said these gases could include carbon monoxide, sulphur oxide and soot, which can be harmful to human health.

Nitrogen oxides in smoke and sulphur oxide are also a cause of acid rain, which can have detrimental effects on vegetation, health and buildings.

Associate Professor Balasubramanian Rajasekhara from the National University of Singapore's department of civil and environmental engineering added that weather often plays a crucial role in such situations.

Should the fire continue and emit large and tall smoke plumes, then particles such as soot will be able to travel a longer distance and potentially hit the city, given favourable wind conditions.

Pulau Bukom fire expected to cause significant supply disruption
Yvonne Chan Channel NewsAsia 29 September 2011 2221 hrs

SINGAPORE: Shell's biggest refinery worldwide is still burning near Singapore and is in the process of being shut down. The outbreak of fire at the petrochemical plant on Pulau Bukom is expected to cause significant supply disruption.

Tankers moored in the smoke-filled channel, 5 kilometres from Singapore, have been warned off the refinery in Pulau Bukom. Its shutdown will close half a million barrels-a-day of oil and petrochemical production. Petroleum product prices spiked in Asia as a result on Thursday.

Taking that much production out of the system will also affect wholesale prices in the Middle East.

Shailaja Nair, Managing Editor (Asia Central editing desk) of Platts, said: "Oman (crude prices) was very high yesterday but then Oman futures are going to be rolling off the board, that's tomorrow on the Dubai Mercantile exchange."

With over 90 per cent of the Shell refinery's output destined for regional export, traders are factoring in a sharp reduction in output. Although, supply flexibility will limit the disruption.

Victor Shum, Managing Consultant at Purvin & Gertz, said: "Back in late July, another major export oriented refinery in Asia, mainly Formosa petrochemical refinery in Taiwan was shut down because of a major fire.

"This month, it's starting to come back on and we're expecting it to run full swing in October. And so with Formosa refinery coming back on, there will be more products coming into the region."

But it is not just oil products that are affected. The shipping industry will also take a hit.

Ms Nair said: "That oil terminal is the busiest in Singapore. And it has 12 berths, it takes very large ships, including VLCC (Very Large Crude Carriers). What the shipping sources have said is that because of the fire, the ships have been asked to leave the berth. So berthing operations are said to be shut down. It's also going to see some effect on freight, because freight has been in the doldrums recently."

Closing production at Shell's refinery, may also spell better margins for the remaining refineries in the region.

Singapore has the second highest refining margins after the United States. What negative impact will this fiery incident have on Singapore and the region?

For now, Industry experts said it really depends on the extent of the damage done and the period for which Shell's refinery remains shut.


Shutdown unlikely to hit supply hard
But prices of some products like petrol may rise somewhat
Robin Chan Straits Times 30 Sep 11;

THE progressive shutdown of Shell's refinery is not likely to have a major impact on the supply and prices of most petrochemical products, analysts said yesterday.

Still, prices of some products including petrol may rise somewhat, they say.

On Wednesday, the oil giant shut down its key hydrocracker unit, which produces petrochemical products from crude oil such as petrol and kerosene, as well as fuel used in ships and aircraft.

'There won't be a severe shortage such that the region will experience a price spike. Certainly consumers in Singapore won't have a problem of not being able to buy petrol,' said Mr Victor Shum, managing consultant at energy consultancy Pervin and Gertz.

Mr Leong Wai Ho, economist at Barclays Capital, said that the shutdown's impact on manufacturing output and exports of petrochemicals from Singapore is also unlikely to be significant.

Petrochemical output makes up 3.5 per cent of total manufacturing here, he said.

The entire refinery, Shell's largest in the world, was in the process of being shut down, the oil company said yesterday, before the fire was reported to have been put out.

The refinery processes 500,000 barrels of crude oil each day and exports 90 per cent of its products.

Shell is likely to be able to support supply to its customers from other refineries around the world, analysts said.

Mr Lee Tzu Yang, chairman of Shell companies in Singapore, said that the company had not declared 'force majeure'. This refers to a clause in contracts where parties are freed from their obligations in extraordinary circumstances.

'We will work with our customers to try and meet their needs. We are very aware that our customers have concerns,' he said.

He added that the company will no doubt incur costs from the shutdown.

Mr Martijn van Koten, vice-president for manufacturing operations in the East and Middle East, said that the company could not disclose how much of its operating capacity had already been shut down.

Analysts said prices of distilled products such as petrol are most likely to rise. These analysts track 'cracks', or the difference in the price of crude oil and the price of the refined products such as petrol or ship fuel.

Ms Amrita Sen, commodities analyst at Barclays Capital in London, said: 'Refinery shutdowns can cause a tightness in the products market, especially if the refinery is as large as (500,000 million barrels a day) and a fairly sophisticated one.

'Parts of the crack will be supported, for instance in distillates, but it will depend on for how long it is shut down for. You would have seen Asian distillate cracks react positively.'

In July this year, Formosa Petrochemical, a major plant in Taiwan comparable to Shell's refinery here, suffered a shutdown due to a fire.

Mr Shum said: 'When Formosa was shut down for more than a month in summer, it was not a problem for the region then. And my hunch is Shell won't be shut down for more than a month or two.

'It will take a few days if nothing really serious has been damaged. But even if processing units are not damaged, there will be an investigation as to the cause of the fire, and I'm sure management will not rush to restart the refinery until the cause is identified.'

The hydrocracker unit also produces a feedstock, known as naphtha, used in processing other petrochemicals, and to make ethylene in another Shell plant nearby.

Traders were doubtful whether the fire and the reported damage to the tanks would have a significant impact on naphtha stocks at the refinery, said Platts, a provider of energy information.

Fire still rages, Shell ready to shut Bukom
Oil giant trying to 'starve' the fire; price of diesel futures rises amid concerns
Ronnie Lim Business Times 30 Sep 11;

(SINGAPORE) Shell - which has already started a two-day sequenced operation to shut down its 500,000 barrels of crude oil distillation capacity here - is prepared to go all the way and shut down its entire Bukom manufacturing site 'if need be', its Singapore chairman Lee Tzu Yang said.

This will allow it to better focus on its bid to put out a controlled, but still-blazing, fire which started on Wednesday afternoon. 'It's hard to run a refinery when you are also trying to fight a fire,' he explained.

The challenge is to put out the fire first, he stressed, acknowledging that the move to shut down its entire Singapore refinery will definitely result 'in (significant) losses in dollar terms'. But it is not about to count the costs just now, as staff safety, and killing the fire safely, are paramount.

'I'm glad that our staff are unscathed, except for a few with superficial injuries ... and although our entire staff came back today, we've taken a decision to operate only with essential staff,' Mr Lee said.

While Shell, 'as of now' hasn't yet declared force majeure on its supply contracts, Mr Lee did not rule out this happening. 'We are currently in discussions with our customers, who are concerned, to meet their needs,' he said.

Force majeure is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, occurs.

The company earlier said that it expects to supply the Singapore market with products from storage here and in other refineries, while its regional refinery network, including in Malaysia and the Philippines, has been activated to help out with its external supplies to customers.

Mr Lee, who was speaking at a press conference last evening, explained that the move to shut down plants was necessary as the behaviour of the fire is 'quite erratic' as seen in yesterday morning's seemingly-controlled situation, followed by the fire flaring up again at noon.

This is because the fire is centred at a pumphouse with a complex of many pipes leading to light product tanks, where 'the moment one pipe is opened, it temporarily feeds the fire again'.

'While the fire is contained at the moment, our strategy is to starve the fire, so that we can put it out completely,' Martjin van Koten, Shell's vice-president for Manufacturing Operations East, said.

'Our prime focus is to put out the fire and not to keep the plants operating,' he stressed.

Already, Shell has shut down two plants which are located in the immediate vicinity of the fire, including a hydrocracker unit, which produces mainly diesel, and another thermal gas unit.

Additionally, it has now started shutting down three crude distillation plants, which are essentially the backbone of the Singapore refinery as they process crude oil into a slate of products, some of which in turn feed the sophisticated plants like the hydrocracker.

The sequenced process to shut down the CDUs has started and will take two days, Mr van Koten said.

This leaves just its catalytic cracker, which produces gasoline, and its brand-new Shell Eastern Petrochemical Complex's ethylene cracker still operating. While sited on adjoining, but-now-linked, Pulau Ular, they may also be shut down if need be, Mr Lee said. 'We have to go through (investigating) a complex system of feeds and interfeeds, so we have to do whatever it takes for the team to fight the fire,' he explained.

The impact of the CDU plant shutdowns by Shell is significant, given that its total 500,000 barrels per day refining capacity accounts for 36 per cent of Singapore's refining capacity of 1.395 million bpd, including at ExxonMobil (605,000 bpd) and Singapore Refining Company (290,000 bpd).

The fire was thought to be accidental and initially linked to a maintenance job. Last night's shocker from Shell helps answer big questions from concerned market players in Singapore's oil hub. They have been anxiously waiting to hear further word on how much the fire is going to hurt Shell's production and oil supplies from Singapore.

The price of diesel futures, as well as those for naphtha and fuel oil, were already seen shooting up in Asian swap trading yesterday.

One oil trader said: 'Certainly there will be a market reaction as Shell has a big facility with a lot of crude throughput and sophisticated units.'

When asked the best-case scenario on how long it expects to take to put out the fire, a senior Singapore Civil Defence Force (SCDF) officer declined to specify a timeframe, saying: 'It's difficult to put a finger on this.'

More importantly, 'we will work with Shell engineers to establish the source that is feeding the fire, so as to be able to effectively put it out quickly and safely'.

What is encouraging so far is that it has managed to keep the fire contained within a bund area, he said.

Some 500 personnel, including 100 SCDF officers, are currently involved in fighting the fire round the clock, with Shell also bringing in an expert from overseas to help out. Under an industry-wide arrangement here, personnel and equipment from other companies, like ExxonMobil, are also there to help out.

Shell Shuts Singapore Refinery; Fire Finally Out
Luke Pachymuthu and Yaw Yan Chong PlanetArk 30 Sep 11;

Royal Dutch Shell Plc finally put out a blaze at its massive Singapore refinery after firefighters struggled to contain it for a day and a half, forcing the firm to start shutting its biggest plant worldwide.

The closure of the 500,000 barrel per day refinery, which makes up more than a third of Singapore's capacity, drove up benchmark fuel prices in the city-state, hub for Asian fuel trade. Officials said earlier on Thursday that they were shutting down all refining units and may shut the attached chemical complex.

The company said in a statement later that the fire, which had started at 0515 GMT on Wednesday, was extinguished, but that there were still traces of fuel vapor. It said it was prepared to shut down all units if necessary for safety, but gave no further details on operations.

"We are focused on safety, and are going through the progressive shutdown of the refinery," Martijn van Koten, vice president for manufacturing operations, told reporters at a briefing on Thursday.

Shutting down the entire refinery will take two days, van Koten said. Shell Singapore's chairman, Lee Tzu Yang, said that the company has not declared force majeure on product shipments.

The fire has proved difficult to douse, and Shell said it had regained in intensity at midday on Thursday.

It said the fire, being tackled by at least 100 firefighters on Bukom island off Singapore, could have started during maintenance work, although it was too early to tell.

Shipping sources have said vessels are not berthing at the refinery. One ship owner said his ship had to pull off from the loading berth at around 1000 GMT on Wednesday, more than 5 hours after the fire started, as a safety precaution.

"We had to cast off (from the berth) halfway through the loading," the shipping source said. "Our vessel is sitting at anchorage now, waiting for further instructions from Shell's terminal, but no indication has been given on when we can go back in."


Benchmark fuel prices across Asia are based on trade in Singapore, so interruptions in supply can trigger price moves out of proportion with the size of the refinery disruption.

Singapore's swaps market surged on Thursday, indicating traders expect tighter supplies even after Shell said it could continue to supply the market from storage and other refineries.

The premium of October gas oil swaps over November hit the highest for an inter-month spread in almost three years. Fuel oil and naphtha also rose to over seven-month peaks.

Shell said production units near the blaze remained shut, including a hydrocracking unit that helps make diesel.

Shell is operating its ethylene cracker normally using alternative feedstock. The unit is typically fed by products from the shut hydrocracker.

The smoke plume generated from the fire has not affected Singapore so far, the National Environment Agency said.

Shell said it continued to monitor pollution levels near the blaze, adding that these remained within acceptable levels.

(Additional reporting by Harry Suhartono, Alejandro Barbajosa, Seng Li Peng, Francis Kan and Jasmin Choo and Naveen Arul; Writing by Manash Goswami; Editing by Michael Urquhart, Simon Webb and Alden Bentley)

Video clips

29 Sep Explosion

29 Sep: Channel 5 report

28 Sep: Channel 5 report