Unit at Philadelphia Refinery Completely Destroyed in Fire

The alkylation unit involved in a massive fire on Friday at Philadelphia Energy Solutions Inc’s oil refinery has been completely destroyed, which will hamper the supply of gasoline from the U.S. East Coast’s largest refinery, sources familiar with the matter said on Sunday.

The destruction of the unit, coupled with damage from the fire that ripped through the 335,000 barrel-per-day (bpd) refining complex, could force the 200,000 bpd Girard Point section of the two-section complex to remain shut for an extended period.

Major units in the Point Breeze section of the plant were also shut down due to unrelated repairs, sources said.

Even when the Girard Point section restarts, it will run at reduced rates due to the loss of the alkylation unit, two sources told Reuters on Sunday.

The damage will test the resolve and the finances of the struggling refiner, which emerged from bankruptcy roughly a year ago and has embarked on a number of cash-saving measures in recent months. It will also have to contend with growing concern from the local community and public officials over whether it can safely operate amid its financial woes.

The fire, which began in a tank and involved several explosions that sent a huge fireball into the sky, engulfing the surrounding areas in smoke early on Friday morning, was extinguished Saturday afternoon, the Philadelphia Fire Department said on Sunday in a statement.

The gas valve that had been fueling the fire was shut off, and the tank involved in the blaze was isolated, the fire department said.

A source familiar with plant operations said one explosion occurred at the 30,000 bpd alkylation unit that uses hydrofluoric acid (HF), one of the deadliest chemicals in the refining business and a source of controversy for its use to make high-octane gasoline at refineries located in densely populated areas.

Hydrofluoric acid can form a toxic cloud at room temperature, with exposure leading to severe health problems and even death.

PES confirmed the fire at the alkylation unit has been extinguished and that the company and a third party are monitoring the air quality insider the facility each hour.

Philadelphia Deputy Fire Commissioner Craig Murphy said in a press conference on Friday that the cause of the fire was unclear.

Four workers were injured and treated on-site, according to a company statement, while city emergency workers treated one person, who did not need to go to a hospital.

The fire comes as the company has faced financial headwinds. Philadelphia Energy Solutions emerged from bankruptcy last year, after filing because of the costs of complying with the U.S. Renewable Fuel Standard, a 2005 law that requires refiners to either blend biofuels into their product or purchase credits from competitors who do.

The refinery has been financially struggling since then, Reuters has reported.