Fluid release ignited blast, fire at Valero refinery, filing shows

By Erwin Seba

HOUSTON, March 24 (Reuters) - A release of fluid set off an explosion and ensuing fire that forced the temporary shutdown of Valero Energy Corp's VLO.N 380,000-barrel-per-day (bpd) oil refinery in Port Arthur, Texas, according to a notice the company filed with state pollution regulators on Tuesday.

No injuries were reported from the explosion in the 47,000-bpd unit 243 diesel hydrotreater, the people said. No date has been set for restarting the refinery.

"An unforeseeable release of process fluid in Complex 2 resulted in an ignition event and multiple process unit upsets," Valero said in the notice filed with the Texas Commission on Environmental Quality (TCEQ) on Tuesday evening.

The refinery outage comes as U.S. consumers contend with rising gasoline and diesel prices because of Iran's closure of the Strait of Hormuz, a key oil and refined product waterway for Middle East producers, in retaliation for U.S. and Israeli air attacks.

Donta Miller, the chief deputy for the Jefferson County Sheriff, said on Tuesday there was no evidence the Monday night explosion felt as far as 11 miles (18 km) away, was the result of a deliberate act by someone intending to damage the refinery.

Since Monday night, posts online have claimed the Port Arthur refinery explosion was the result of sabotage by either Iranian or Israeli agents.

"No, we're not investigating it as that," Miller said.

Shutting the refinery was seen as necessary to extinguish the fire, the sources said, by cutting off flammable materials feeding the flames. The refinery lost water supply and steam as firefighters battled the blaze.

Diesel hydrotreaters use hydrogen to remove sulfur from motor fuels during their production to comply with U.S. environmental rules.

The fire was put out on Tuesday and a shelter-in-place order for west Port Arthur residents issued at about 6:20 p.m. CDT (1120 GMT) on Monday was lifted shortly before 6 a.m. CDT on Tuesday.

According to the TCEQ filing, the Valero refinery's large crude distillation unit, gasoline-producing fluidic catalytic cracker, diesel-producing hydrocracker, cokers, sulfur recovery units, hydrotreaters, reformer and alkylation unit were shut.

Valero's Port Arthur refinery, the company's largest, is situated 86 miles (138 km) east of Houston.