Shell restarts some Bukom plants after checks

Meanwhile, a probe by the Manpower Ministry into the fire continues
Ronnie Lim Business Times 11 Oct 11;

PULAU Bukom - Shell's largest manufacturing facility in the world - is starting to stir back to life, even as a probe continues into the cause of a 32-hour fire which broke out there almost a fortnight ago.

The oil major said that after carrying out safety checks, it has begun to restart some plants which were earlier shut down because of their proximity to 'ground zero' of the fire - a pumphouse with a maze of oil pipelines connecting to manufacturing units as well as storage tanks.

The Bukom shutdown resulted in Shell declaring force majeure on its product supplies to other Jurong Island plants such as Petrochemical Corporation of Singapore and Ellba Eastern (both of which it holds stakes in), as well as for some of its contracted supplies to outside customers.

This also saw it turning into an active market buyer, from seller previously, of products such as diesel and gasoline which it needed to source to help cover its customer commitments.

When contacted yesterday for an update on whether Bukom had started its recovery process, a Shell spokesman said: 'When the fire started, the units adjacent to pumphouse 43 were shut down as a safety precaution. During the next days, several other units were also shut down.

'A dedicated safety study has been performed for all units adjacent to the incident site and it has been confirmed that these are not damaged.

'We can confirm that some operations have continued and some operations will resume at the site, but we are unable to comment on operational specifics,' the spokesman said, declining to identify exactly which units had been restarted.

Shortly after the fire first broke, Shell had reportedly already shut down a hydrocracker unit - which produces mainly diesel - and also a thermal gas unit which were close to the blaze.

And Martjin van Koten, Shell's vice-president for manufacturing operations east, told media about 30 hours into the blaze that it had also begun a two-day sequenced operation to shut down three crude distillation units (CDUs) which account for Bukom's entire 500,000 barrels per day crude oil processing capacity.

This left just its catalytic cracker, which produces gasoline, and its new Shell Eastern Petrochemicals Complex's ethylene cracker on Bukom, which Shell also earlier indicated would be shut if necessary.

But from the latest indications, it seems that Shell may not have entirely shut down all the Bukom plants, and could have just reduced operations at some.

A Reuters report citing sources yesterday said that Shell appears to have restarted the largest of the three CDUs so as to produce base oils to feed a high-value lubricant oil unit, and also light distillates to keep its chemicals complex running, albeit at lower rates.

Meanwhile, a probe by the Manpower Ministry is still on-going, with earlier speculation that it would be concluded at the earliest this week.

The ministry's preliminary findings showed that the fire broke out at the pumphouse during preparation work for maintenance, with this involving the draining of residual oil in a pipeline and removing it by means of a suction truck.

Shell refinery at Pulau Bukom restarts operations
Avelyn Ng Channel NewsAsia 10 Oct 11;

SINGAPORE: Two weeks after the fire at the Singapore refinery, Shell has partially restarted the 210,000 barrels per day CDU (Crude Distillation Units). The units are capable of processing 500,000-bpd of crude.

A spokeswoman from Shell added: "We can confirm that some operations have continued and some operations will resume at the site but we are unable to comment on operational specifics."

According to media reports, the CDU will be operating at a reduced rate of around 50 per cent as it waits two to three days to recover to stable operating levels.

Meanwhile other units, including the other two CDUs of 110,000-bpd each and its 35,000-bpd hydrocracker, remain shut.

"When the fire started, the units adjacent to pump-house 43 have been shutdown as a safety precaution. During the next few days, several other units have been shutdown. A dedicated safety study has been performed for all units adjacent to the incident site and it has been confirmed that these are not damaged," said Shell's spokeswoman.

It was also reported that in response to its previous force majeure on about 1.5 million barrels of distillates, Shell has agreed with two of its four counterparties - Hin Leong, Glencore, BP and JP Morgan -- to buy back more than 70 per cent of the gas oil and jet fuel cargoes involved.

-CNA/ac

Shell partially restarts Pulau Bukom refinery
Straits Times 11 Oct 11;

ROYAL Dutch Shell has resumed some operations at its Singapore oil refinery, less than two weeks after the plant was shut because of a fire, three industry sources with direct knowledge of the matter said yesterday.

'We can confirm that some operations have continued and some operations will resume at the site, but we are unable to comment on operational specifics,' Shell spokesman Serene Loo said in e-mailed comments.

Shell exports 90 per cent of the products it distributes in the Asia-Pacific from the offshore Pulau Bukom refinery, its largest worldwide.

The plant has a capacity of 500,000 barrels per day (bpd), according to Shell's website.

The move to partially restart the 210,000 bpd crude distillation unit (CDU), one of three at the Pulau Bukom site, is due to strong margins for base oils and lubricants. It will also yield light distillates, sufficient to keep Shell's chemical complex running at reduced rates.

The CDU, which will take two to three days to reach stable operating levels, is expected to operate at a reduced rate of around 50 per cent, while a probe into the cause of the fire and repair works continue, people familiar with the situation said.

'The CDU can be restarted because the delivery of its yield of clean oil products has been diverted away from the affected area,' one of the sources said.

'The CDU, the base oil production unit and the lubes plant are all away from where the fire occurred.'

Other units, including the other two CDUs of 110,000 bpd each and a 35,000 bpd hydrocracker, will remain shut.

'The damage to the refinery as a result of the fire remains extensive, and it will take a while for the plant to return to normal operating levels,' one source said.

Shell, Europe's biggest oil company, has declared force majeure on some customers, a contract clause that allows supply obligations to be cancelled.

Preliminary investigations showed that the fire, the biggest at the site in 23 years, started at a pump house as Shell prepared for maintenance work, Singapore's Manpower Ministry said last week.

Pulau Bukom is about 5.5km from the financial hub of Singapore,

Asia's largest oil-trading, refining and storage centre.

The 50-year-old refinery includes three CDUs, a sulphur recovery unit, a hydro-desulphuriser and a high-vacuum unit that supplies a hydrocracker, according to data compiled by Bloomberg and a Shell document from December 2009.

Pulau Bukom also houses a fluid catalytic cracker with a capacity of 34,000 bpd, a 155,000 tonne-a-year butadiene extraction unit and an 800,000 tonne-a-year ethylene cracker complex.

Shell also operates a 750,000 tonne-a-year mono-ethylene glycol unit on neighbouring Jurong Island, where refineries belonging to ExxonMobil and Singapore Refining, a joint venture between Chevron and Singapore Petroleum, are located.

REUTERS, BLOOMBERG