(Updates gasoil premium in fifth paragraph.)
Oct. 6 (Bloomberg) -- Royal Dutch Shell Plc will keep its Singapore refinery shut until investigations into a fire last week are done, it said as government firefighters left the site.
Shell shut the offshore Pulau Bukom plant, its largest globally, after the fire started Sept. 28 and suspended fuel shipments to some clients. It is talking to customers about their supply needs, according to today’s statement. The 500,000 barrel-a-day refinery exports 90 percent of its products to the Asia-Pacific, Europe’s largest oil company says on its website.
“We do not expect any of the units to be restarted until a thorough investigation has been done and we are confident that it is safe to do so,” Serene Loo, a Shell spokeswoman in Singapore, said in e-mailed comments today.
The profit from turning crude into gasoil, or diesel, rose as much as 13 percent in the days after the fire. It declined this week as Taiwanese refiner Formosa Petrochemical Corp. lifted a force majeure of its own, boosting regional supply.
Gasoil’s premium to Asian benchmark Dubai crude was down $1.03 at 2:09 p.m. Singapore time from yesterday to $16.64 a barrel, according to data from PVM Oil Associates Ltd., a London-based broker. This crack spread, a measure of refining profit, was the narrowest since the Shell fire broke out. It was $16.22 before the blaze.
The Singapore Civil Defence Force, which battled the fire for more than 30 hours, said it has withdrawn all remaining personnel from the island because its support is “no longer required.” An investigation is still ongoing, it said in the e- mailed statement yesterday.
Preliminary findings showed the fire started at a pump house as Shell prepared for maintenance work, according to Singapore’s Manpower Ministry, which is probing the incident.
The refinery may be closed for at least two weeks, estimated Victor Shum, a senior principal at Purvin & Gertz Inc., a consultant in Singapore. A complete shutdown may last for as long as a month, Standard Chartered Plc said in a report Oct. 4.
Pulau Bukom is about 5.5 kilometers (3.4 miles) from the financial hub of Singapore, Asia’s biggest oil-trading, refining and storage center. The blaze affected an area 150 meters (492 feet) by 50 meters, about the size of a soccer field.
The 50-year-old refinery includes a sulfur-recovery unit, a hydro-desulfurizer and a high-vacuum unit that supplies a hydrocracker, based on a Shell document from December 2009. Pulau Bukom also houses a fluid catalytic cracker with a capacity of 34,000 barrels a day, a 155,000 metric-ton-a-year butadiene-extraction unit and an 800,000 ton-a-year ethylene cracker complex.
Saudi Arabian Oil Co., the world’s largest crude exporter, agreed to cancel an October shipment to Shell’s refinery, according to five people with knowledge of the matter. The company, known as Saudi Aramco, agreed to not ship one cargo of 2 million barrels of Arab Light crude, said one of the people. The parties are discussing whether to cancel a second cargo, the people said.
Shell’s ethylene cracker will also be shut as refinery units feeding it were taken offline after the fire, according to a person with direct knowledge of the matter, who asked not to be identified as the information is confidential.
The company operates a 750,000 ton-a-year mono-ethylene glycol unit on neighboring Jurong Island, where refineries belonging to Exxon Mobil Corp. and Singapore Refining Co., a joint venture between Chevron Corp. and Singapore Petroleum Co., are located.
--Editors: Paul Gordon, Mike Anderson.
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