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Fire idles BP’s Cherry Point refinery Outage has little impact on Alaska North Slope crude production or shipments; state economist sees ample storage cushion in system Wesley Loy For Petroleum News
A fire broke out on the afternoon of Feb. 17 at BP’s Cherry Point refinery in Washington state, shutting down operations that depend heavily on shipments of Alaska North Slope crude oil.
Only one minor knee injury was reported in the incident, and despite some dramatic flames and smoke, BP said the fire was extinguished in an hour.
The fire occurred around the refinery’s crude processing unit, burning asphalt-like vacuum residual oil, BP said.
The company couldn’t say when the crude unit, as well as other refinery units placed into standby mode, would be up and running again as an investigation continued.
An initial report to the National Response Center described the incident as “a flange fire between the north vacuum heater and north vacuum tower of the crude unit.”
Big Alaska crude user Cherry Point, one of five BP refineries across the country, was acquired in the 2000 takeover of ARCO. The facility is located near Blaine, Wash., close to the Canada border.
In operation since 1971, it is one of the newer U.S. refineries with capacity to process 234,000 barrels a day of crudes from all over the world.
BP says Cherry Point processes “a large share” of North Slope crude, which leaves Alaska on tankers bound almost entirely for West Coast refineries.
Cherry Point provides about 20 percent of the gasoline market share in Washington and Oregon, and the majority of jet fuel for the Seattle, Portland and Vancouver, British Columbia, international airports, BP says.
The refinery outage pushed up West Coast prices for gasoline and other refined products, according to published reports.
No impact in Alaska The Cherry Point fire seemed to have no significant effect on Alaska, including production of North Slope oil or operations at the Alyeska tanker terminal at Valdez.
“We haven’t seen any shift in production or tanker movement,” Michelle Egan, a spokeswoman for Alyeska Pipeline Service Co., told Petroleum News on Feb. 22.
The Alyeska terminal has more than a dozen enormous oil storage tanks, and on Feb. 22 about 70 percent of storage capacity was being used — a normal reading, Egan said. As tankers load oil, capacity can swing well above or below that figure, she said.
Throughput on the 800-mile trans-Alaska pipeline stood at 614,000 barrels per day, also normal, Egan said.
Tankers are able to pick up oil and divert to other refineries, and so “it’s pretty much business as usual,” she said.
Scott Dean, a Chicago-based spokesman for BP refineries and other downstream operations, couldn’t say whether Alaska crude was continuing to arrive at Cherry Point.
Plenty of storage Joyce Lofgren, a petroleum economist with the Alaska Department of Revenue, said large volumes of oil can be held not only at the Alyeska terminal but also on tankers at sea and at the Cherry Point refinery.
“So there’s a lot of storage in the system,” she said.
She believes a curtailment of North Slope production is highly unlikely, even if the Cherry Point outage goes on a good while.
One option is for BP to sell a cargo or two of crude on the spot market, Lofgren said.
“BP is rarely a seller of crude,” she said. Normally, the company is what’s known as “crude short,” meaning it generally needs all of its own oil and more to feed its refineries.
Aside from Cherry Point, BP also has a major refinery at Carson, Calif.
Lofgren said she saw one report in the trade press that an extended shutdown at Cherry Point could depress the Alaska North Slope crude price.
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