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July 5th, 2012

Caustic Vapors Ruined Biggest US Refinery

By Kent Harrington | Comments (5)
Disaster began as a slow, small and unnoticed chemical spill – maybe even less than a barrel – until it destroyed the newest and largest oil refinery expansion in the US. How did this process safety nightmare unfold so stealthily and quickly? Just days before, on May 31, 2012, a valve turning ceremony by CEOs from Royal Dutch Shell and Saudi Aramco marked the startup of the expanded Port Arthur Motiva refinery and celebrated the completion of a difficult five-year construction project that more than doubled the facility’s daily capacity to 600,000 barrels of crude. (Read Motiva press release or watch video.) Turning the valve started the crude-flow through the refinery's new units, after an expansion that required 14,000 construction workers, 2,000 pieces of equipment and 40,000 truckloads of concrete, along with 700 miles of pipe. Construction began in 2005 but stalled in 2009 as markets dried up. Eventually the project ran $5 billion over budget and struggled to finish two years behind schedule. The opening ceremony came as many refineries, particularly on the East Coast, in the Caribbean, and Europe shut down or struggled to stay profitable – all handicapped by older equipment that was unable to process new sources of oil like the heavier crude coming from Canadian oil sands. But Motiva's new expansion could process a range of crude types. Khalid Al-Falih, CEO of Saudi Aramco, said flexibility would help make the $10 billion investment pay off, allowing the refinery to adjust to unpredictable global markets. Over two weeks ago, 11 days after it occurred, Motiva confirmed for the first time that the unit might remain shut for "several months." Sources told Reuters that officials are telling workers that the unit could be idle for as long as a year. Now the companies are rushing to repair a billion-dollar debacle that has added a costly capstone to the already $10 billion project. They must try to reassemble the same people and parts to make serious repairs that may surpass the expansion's original $300 million cost of the unit. Corrosion experts are flying in; hundreds of workers were rehired; custom-made 30-inch (75-cm) stainless steel pipelines were sourced quickly, sources told Reuters. Meanwhile, every day the unit remains idle, a $1.5 million profit is lost.

Gradually discovering a huge problem

Motiva has developed a theory about what appeared to be a rare instance of "accelerated chemical corrosion." Trouble began just two days after the June 2 ceremony. The company had decided to halt production temporarily to search for a leaking valve that was allowing vapor to escape from the Crude Distillation Unit (CDU). According to Reuters, officials thought it was a minor problem. Unfortunately, It took nearly a week to finally stop the leak, and the unit wasn't completely shut down, to prevent it from going cold. Then, while the plant was idled, the caustic, used to neutralize the acid in the heavy, sour crude that the new CDU was made to process, continued to leak into the unit.

The damage stealthily spread

Normally, the small amount that leaked in the CDU should have been harmless, diluted by circulating crude. But there were few hydrocarbons present because of the so-called "warm circulation" process employed during the brief shutdown. After the repairs, Motiva began reheating the unit to resume operations; as the temperature reached 300 to 400° F, the leaked caustic vaporized. Unlike a refinery blast, as the vaporized caustic pitted the inside of the atmospheric section that performs the initial stage of crude oil conversion, the damage went undetected, and, only after two fires broke out and a heater ruptured, did operators suspect something was seriously wrong.

A  long aftermath to rebuild

Motiva has continued to run many of the unharmed secondary units, although without the crude tanks they must buy intermediate feedstock from other refiners or shut peripheral units, as Motiva did last week. But stainless steel piping, some sections as large as 30 inches in diameter, was damaged. Such equipment, part of more than 700 miles of pipe built to order, may be costly to replace. "If someone has 30-inch stainless steel pipe for sale, I would guess they're going to charge a premium price," one of the sources said. The cost to complete repairs may be as much as replacing the whole unit, which was originally estimated to cost some $300 million when the project was launched in April 2005. Without knowing exactly why the caustic leaked, it's not possible to say who, if anyone, is at fault. The two main contractors for the project -- Bechtel and Jacobs Engineering -- declined to comment. Meanwhile, each day the unit remains down is $1.5 million that Motiva isn't earning, and 144 million miles worth of gasoline that isn't being supplied to the U.S. market during the height of the driving season. Click to read the entire Reuters article.

Will this shortage affect US gas prices?

Images: Refinery, Motiva; Ceremony, SaudiAramco
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5 Responses to “Caustic Vapors Ruined Biggest US Refinery”

  1. Robert S says:

    Interesting how gas prices used to be on a hair-trigger, but now big news barely causes a ripple. Have the media adjusted to the new "normal" of domestic supply or is everyone watching the Euro?

  2. harrington.kent says:

    I see a new article every day about lower has prices (albeit in FuelFix etc). I've also seen a few "price crash" essays. Prices have been dropping in Houston and california at the sane time.

  3. Robert S says:

    Right, so any shortage from this shutdown has not effected the local price. But demand continues a slight downward trajectory and it seems that any temporary imbalances are met with imports quickly.

    Have no fear complaining about gas prices shows no sign of weakening.

  4. harrington.kent says:

    Not to mention the constant ramping up of crude from Bakken and Eagle Ford. Oil prices are predicted to drop 7% over the next year.

  5. This just goes to show how one tiny crack can cause a whole world of problems. Just about the only thing left to do in this case is clean up the mess and improve the containment equipment to avoid a repeat of the incident.

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