Blast Shakes Valero's Port Arthur Refinery
On Monday, an explosion and fire hit the Valero refinery in Port Arthur, Texas, rattling windows and startling nearby residents. The refinery is one of the 10 largest in the United States, and any outage could have an effect on refined product prices during a period of peak global demand.
The blast was reported at about 1700 hours at a processing unit inside of the plant, followed by flame and heavy smoke. The City of Port Arthur issued a shelter-in-place order for residents up to 10 miles away, as far south as Sabine Pass.
JUST IN - Massive fires burn after loud explosion heard at the Valero oil refinery in Port Arthur, Texas. pic.twitter.com/bnfh40XQjT
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The cause of the incident is under investigation, but the Port Arthur sheriffs' office told local media that an industrial heater was the suspected source.
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The Valero Port Arthur refinery has a nameplate capacity of 435,000 barrels per day, and is designed to handle heavy sour crude - notably Venezuelan grades. Valero acquired the plant through the purchase of independent refiner Premcor in 2005, and has since invested heavily in upgrades.
U.S. gas and diesel prices are at multiyear highs, driven upwards by the oil crisis in the Arabian Gulf. Average diesel prices in California are nearing the $7 per gallon mark, approaching record levels. The Trump administration has temporarily waived the Jones Act for coastwise tanker shipping, hoping to ease flows of fuel from the Gulf Coast's refiners - including Valero Port Arthur - to West and East Coast markets.
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