Economy may lose more than $100m if refinery is closed for a month: Economists

Pulau Bukom Shell refinery fire: Counting the losses      Published on Oct 5, 2011 in the Straits Times

 

What Shell's Pulau Bukom offshore petroleum complex in Singapore looked like after a fire was put out on Sept 29. -- PHOTO: REUTERS

By Robin Chan

 

The all clear was given on Shell's Pulau Bukom refinery site on Tuesday, even as operations remain in the process of being shut down. An all-clear safety siren was sounded at 2pm. However, the area around what is known as pump house 43, which is where the fire broke out seven days ago, is still under 'strict control' according to an internal staff memo.

The local economy could suffer a hit of more than a $100 million if the massive Bukom refinery closes for a month, economists have said. The oil giant's plant, which refines 500,000 barrels a day and is Shell's largest in the world, was shut down following a 32-hour fire last week.

Economists looked at the value added to the economy from the petroleum refining and petrochemicals industries, to estimate the cost of closing the plant. Naturally, the costs will vary depending on how long the closure lasts and how much economic activity is lost.

Preparation work likely cause of Bukom fire

The Ministry of Manpower (MOM) has found that the 32-hour-long fire at Shell's Pulau Bukom refinery was caused by preparation work for maintenance.

An investigation conducted by the MOM's Occupational Safety and Health Inspectorate found that a suction truck that was involved in siphoning residual oil through a pipeline could have cause a spark and ignited the oil, reported The Straits Times.

The fire eventually spread and became a lot bigger within the area of the pump house. The petroleum company has confirmed that it they have declared force majeure on a few clients as more investigations continue.
Force majeure is a clause used commonly in contracts that frees parties from liability when an uncontrollable event happens.
Shell's safety procedures are also under scrutiny by MOM.
There were no casualties resulting from the fire that started last Wednesday last until Thursday night.

Source: www.asiaone.com 4 Oct 2011

Traces of fuel vapour remain in affected area after Shell Bukom fire

<>Picture taken on 30 September. Foam used by firefighters in the vicinity of the pump house (photo taken from Shell Singapore website)<> <>SINGAPORE: The Singapore Civil Defence Force (SCDF) says traces of fuel vapour remain in the affected area, two days after the blaze at Shell's Pulau Bukom oil refinery was extinguished on Thursday after a 32-hour battle. The oil giant and authorities are monitoring the situation, and a fresh batch of firefighters was sent to the island on Saturday morning. Giving an update, Shell said foaming operations are continuing at parts of the incident site, with damage confined to the vicinity of the pump house. It added other facilities and units are not affected and only essential operating personnel are on the island. Shell said it's too early to assess how much the fire will cost the company. It said efforts are ongoing to bring the situation back to normal at the refinery, the company's biggest. The company does not expect any shutdown units to be restarted until a thorough investigation has been conducted and safety is assured. The Ministry of Manpower has stepped in to investigate the cause of the fire. Shell said it deeply regrets the incident and is talking to customers to address product supply and minimise any potential impact on them. Source: CNA/ir <>

Gov't probes cause of Bukom refinery fire

Smoke and flames rise from the Royal Dutch Shell's Pulau Bukom offshore petroleum complex in Singapore on Wednesday 28 September 2011. Another explosion occurred Thursday, 29 September 2011 around noon local time.

(AP Photo/Sharon Tan)

The government is investigating the cause of oil giant Shell's recent Pulau Bukom refinery fire, which saw more than 100 firefighters battling the erratic two-day blaze.

Two investigators from the Ministry of Manpower (MOM) have been deployed to the island and are working with Singapore Civil Defence Force (SCDF) officers.

The ministry said on Friday it would work with Shell to examine its safety framework and tighten safety standards to prevent another such occurrence, reported The Straits Times.

MOM officers are also looking for the cause of the fire, which began in the pump room that had interconnecting pipes with fuel compounds.

The fire, which started on Wednesday 1:15pm, was finally extinguished at 9:18pm on Thursday after 32 hours. The SCDF used water jets and foam to disperse traces of fuel vapor that was still in the air on Friday.

Six Shell firefighters who were injured while fighting the initial outbreak have gone back to their normal duties after medical treatment.

SCDF said it would keep 100 firefighters and 34 vehicles on the island as precaution.

Shell sources also confirmed with the paper that the refinery is still progressively shutting down but a spokesperson said no timeline has been given for how long it will continue or when the investigations will be completed.

Wire reports have reported that the shutdown could last a month.

Deputy Prime Minister and Home Affair Minister Teo Chee Hean visited the refinery for an hour on Friday. He told the paper there was good cooperation between SCDF and Shell, as well as in the industry.

"The fire has been extinguished. The key thing now is to make sure that it does not reignite, and the residual hydrocarbons from the fire are properly dealt with," he was quoted as saying.

"We also want to make sure that the risks are properly handled and reduced. Going forward, we should learn from the lessons and prevent the occurrence of such fires," he noted.

Pulau Bukom is Shell's largest refinery worldwide. It processes 500,000 barrels a day with 90 per cent of the products exported to the Asia Pacific region and beyond.

 

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