Chevron says Richmond repair timing unknown

RICHMOND, California (Reuters) - Chevron needs a few more weeks to assess damage at its plant in Richmond, California, and does not yet know how long it will need to repair its crude unit after an early August fire damaged the state's second-biggest refinery, its general manager said on Monday.

The 245,000 barrels-per-day plant, which accounts for one-eighth of California's refining capacity, has run at a reduced rate since the fire and has risen only marginally since then, General Manager Nigel Hearne said in an interview.

The lower throughput caused a jump in gasoline prices in California as traders scrambled to find alternative supplies. The outage has left California, which consumes more gasoline than any other U.S. state, more vulnerable to price spikes when any of the other 15 plants in the state have problems.

While investigations of the fire's cause are still under way, the focus has centered on a failed pipe component less than 5 feet long.

Hearne said the pipe had a low-silicon content, making it more susceptible to corrosion, which was understood by its technical staff but not acted upon. "Clearly it wasn't, so the question is why wasn't it," he said.

Chevron found that the 200 feet of piping in question had been inspected in 19 different locations in November 2011, but not the component that failed.

Asked about how long the plant will be down, Hearne said assessments of the damage would need to be completed in the "next few weeks" to establish the timeline for repairs.

"We're still in the process of fully inspecting the plant," he said, including every individual component in carbon steel systems exposed to the same "sulfidation corrosion conditions" that affected the damaged pipe.

Hearne said full access to the refinery had just been opened up by investigators. The supply for the refinery was being provided by both the market and Chevron's other U.S. refineries.

This year, the Richmond refinery, Chevron's oldest, has been celebrating 110 years since it opened.

(Reporting by Braden Reddall in Richmond and Erwin Seba in Houston; Editing by Andre Grenon, Gary Hill)

Source: http://news.yahoo.com/chevron-says-richmond-repair-timing-unknown-235432548--finance.html

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