Utah regulators issue $1m in fines for Silver Eagle refinery

23 June 2010 23:22  [Source: ICIS news]

HOUSTON (ICIS news)--The Silver Eagle refinery in Salt Lake City, Utah, continues to operate at reduced rates just as regulators have issued more than $1m (€810,000) in fines following an explosion last November, sources said on Wednesday.

The Utah Occupational Safety and Health (UOSH) issued its preliminary citation and notification of a fine of more than $1m to the refinery for its November explosion. The citation listed 16 willful violations, one repeat violation and 34 serious violations, according to Bill Adams, operations manager for UOSH.

“The refiner will have 30 days to file a letter of content,” Adams said.

Silver Eagle said it had submitted a document stating that they were planning to contest some of the citations and the fine.

“Elements of the explosion are still under investigation. A section of the ruptured outlet line that was damaged during the incident was recently sent to a laboratory for analysis, and there are teams of engineers reviewing information,” the refiner said in a statement. “It will most likely be months before there are final findings.”

Meanwhile, seven months after the explosion, the refinery was operating again, but at reduced rates.

The refinery was processing about 10,250 bbl/day of crude oil before the explosion damaged one unit last year. Silver Eagle shut down voluntarily to examine all of its refining units.

On 17 February, the refinery restarted a suspended crude-oil unit that has been processing about 4,000 bbl/day of crude into gasoline, diesel and wax.

The next processing unit to restart would most likely be the low-pressure vacuum unit, but no date has been scheduled for its start up, said Mike Redd, vice president of refining and operations.

Neither the fines nor the restart were expected to have a huge impact on US wax markets, market players said.

Most of the unfinished wax produced there is sold to refiners who refine it into more profitable products such as fully-refined, high-melt point paraffin wax.

“Since the refinery is producing again and expected to eventually produce even more, it may have a slightly positive impact by increasing supply availability,” a trader said.

Silver Eagle said it had settled 233 of the 296 insurance claims that had been filed, and 57 were in the process of being settled. According to refinery officials, the majority of the homes that were damaged had been repaired.

($1 = €0.81)

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By: Heather McGuire Doyle
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