From: Luke Pachymuthu and Yaw Yan Chong, Reuters, SINGAPORE
Published September 29, 2011 07:35 AM

Major fire shuts most of Shell Singapore refinery

Royal Dutch Shell Plc has shut most of its half-a-million barrels-per-day Singapore refinery, sources said, as firefighters struggle to contain a blaze that has been burning for more than a day.

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The plant is the largest Shell owns and makes up more than a third of Singapore's refining capacity. The city-state is Asia's crude and refined product trading hub and hosts the world's largest fuel oil market.

Benchmark fuel prices across Asia are based on trade in Singapore, so interruptions in supply can trigger price moves out of proportion with the size of the refinery disruption.

Industry sources said Shell has shut two of its three crude distillation units, including the largest No 5 unit, with the third running at reduced rates.

A Shell spokesman declined comment on the shutdown of the crude units or the status of the blaze. The fire has proved difficult to douse, and Shell said it regained in intensity at midday on Thursday, nearly 24 hours after the blaze started.

"At around noon, we experienced a surge in the fire which continues to be contained," Shell said in a statement on Thursday. "The source of the fire are remnant light fuel components within the specific area where the fire originated."

Shell is investigating the cause of the blaze, being tackled by at least 100 firefighters on Bukom island off Singapore.

Shipping sources have said vessels are not berthing at the refinery. One ship-owner said his ship had to pull off from the loading berth at around 1000 GMT on Wednesday, more than 5 hours after the fire started, as a safety precaution.

"We had to cast off (from the berth) halfway through the loading," the shipping source said. "Our vessel is sitting at anchorage now, waiting for further instructions from Shell's terminal, but no indication has been given on when we can go back in."

Photo shows smoke and flames engulfing the Royal Dutch Shell's Pulau Bukom offshore petroleum complex in Singapore September 28, 2011. Credit: REUTERS/Edgar Su

Article continues: http://www.reuters.com/article/2011/09/29/us-shell-refinery-fire-idUSTRE78R2B420110929

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