Explosion at Husky Energy Ohio refinery, output cuts expected

Husky Energy's President and CEO Asim Ghosh addresses shareholders during the company's annual general meeting in Calgary, Alberta, May 7, 2014. Husky Energy Inc, Canada's No.3 integrated oil company, reported a bigger-than-expected 24 percent rise in first-quarter profit, helped by stronger prices for its crude oil, natural gas liquids and bitumen. REUTERS/Todd Korol (CANADA - Tags: ENERGY BUSINESS)

(Reuters) - A loud explosion rocked Husky Energy's 155,000 barrel per day (bpd) crude oil refinery in Lima, Ohio, on Saturday and a source familiar with the facility's operations said output had been stopped as units continued to circulate crude. No injuries were reported in the blast, which occurred at about 6 a.m. local time, but fires continued to burn into the evening, according to a person familiar with the plant. The explosion was heard across the city of Lima and shattered nearby windows, according to local media reports. The blast involved the 26,000-barrel-per-day isocracker unit, according to a source familiar with the facility's operations. At the time of the blast, the unit was being restarted after being shutdown for maintenance, a second source familiar with the refinery's operations said. There was extensive damage to that unit and the nearby ultraformer unit, a reformer which boosts the octane in gasoline, a third person said. Output has been halted with the units on "circulation" to keep them warm despite the frigid weather, according to one of the people. The person said the units would likely be on circulation for at least several days. An isocracker is a type of hydrocracking unit, which uses hydrogen under high heat and pressure to increase the amount of motor fuels made from crude oil. Husky spokesman Mel Duvall said in an email at 3:30 p.m. Saturday that the fire was "essentially out," adding that "it was too early" to say the impact on production. "We do have substantial product in inventory to continue to supply customers," he said. A source said the isocracker is situated in a section of the refinery called the Lima Integration Unit, built around 1970. That section includes the crude unit, hydrocracker, naphtha hydrotreater, and reformer, which are the most modern part of the plant, according to documents filed with the U.S. Securities and Exchange Commission. They are separate from older parts of the plant, including the delayed coker and catalytic cracker, according to the documents. The isocracker unit was previously damaged in a 2009 fire, Reuters has reported in the past. All personnel were accounted for at the refinery, Husky Duvall said. He did not say which units were involved in the fire. The refinery gets about 65,000-bpd of crude imported from Canada, a mix of light and medium grades, according to the latest data from the U.S. Energy Information Administration. In addition, it runs domestically produced crude oil. Because gasoline inventories have been high, the fire is unlikely to impact the prices of crude or refined products, said John Kilduff, a partner at Again Capital. "I think what's going to be telling here is to highlight how bearish the complex is," he said. "If King Abdullah being ill couldn't get a rally going, I doubt a small refinery fire at the Lima refinery will have any impact, either," he added, referring to the Saudi king's illness with pneumonia earlier this month. The weather in the northern United States has been bitterly cold this week, with some areas seeing wind chill temperatures below 0 Fahrenheit (below -17 Celsius). Husky did not say whether the cold temperatures had affected the refinery's performance. BP Plc shut a crude distillation unit at its Whiting, Indiana, refinery on Thursday night. Husky is Canada's third largest integrated energy company and is controlled by Hong Kong billionaire Li Ka-shing. (Reporting by Erwin Seba in Houston and Jarrett Renshaw in Philadelphia; Editing by Louise Heavens, Jessica Resnick-Ault, Frances Kerry and Andrew Hay)

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