January 11, 2015 / 2:51 AM / 3 years ago

UPDATE 1-Fire shuts much of Philadelphia Energy refinery -source

(Updates with company comments and more details on incident.)

By Jarrett Renshaw

NEW YORK, Jan 10 (Reuters) - The largest refinery on the U.S. East Coast was operating at less than half its capacity late on Saturday because of a fire, a source familiar with the operations said, while plant officials reported the incident as “flaring.”

A source familiar with operations at Philadelphia Energy Solutions’ 335,000 barrels per day (bpd) refinery said a fire had hit the 200,000-bpd crude distillation unit in the larger Girard Point section of the plant, forcing it to shut.

The incident happened at 3:30 p.m. ET (2030 GMT) on Saturday, a company spokeswoman said, adding there were no reports of injuries.

The fire started when a valve blew out on the unit, the source said.

A company spokesperson did not confirm a fire, but said the plant had “experienced cascading operational issues that resulted in flaring with heavy smoke.”

Flaring is used to release flammable gases when a refinery experiences an upset, but does not typically cause excessive black smoke, which local media reported had been visible for several hours.

The fire has been brought under control, but Girard Point could remain shut for “a while,” according to the source.

The spokesperson did not comment on the status of operations but said they were working on “trouble shooting the problem to restore to normal operations.”

The same crude unit caught fire in May 2012, according to a Reuters report.

It was the second serious refinery disruption of the day, following an explosion and fire at a secondary unit of Husky Energy’s 155,000 bpd crude oil refinery in Lima, Ohio, that forced it to stop production.

While there is no suggestion that the events are related, the two disruptions could trigger gains in U.S. gasoline and diesel prices when markets reopen on Sunday evening, particularly if the Philadelphia plant remains shut for long.

Philadelphia Energy Solutions, owned by a joint venture between the Carlyle Group and Energy Transfer Partners , is a major supplier of fuel on the East Coast and can have a large impact on the New York harbor market, the pricing point for benchmark gasoline and diesel futures.

Reporting By Jarrett Renshaw; Editing by Andrew Hay and Alan Crosby

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