Chicago Wholesale Gasoline Prices Rise on BP Whiting Refinery Fire

Wholesale gasoline prices surged in Chicago on Thursday after a fire hit a piece of equipment used to produce gasoline at BP Plc's refinery in nearby Whiting, Indiana, trade and industry sources said.

BP said the fire was extinguished at its biggest U.S. plant and it expects little impact on production. The 413,500 barrel per day (bpd) refinery, which BP spent $4 billion expanding to handle more heavy Canadian crude, was still operating.

But gasoline prices rose as traders worried about Whiting, the largest refinery in the U.S. Midwest. They said Chicago CBOB gasoline traded at a 13.00 cent premium to October RBOB futures on the New York Mercantile Exchange, up 5.50 cents per gallon from Wednesday's finish.

Whiting Fire Chief Gus Danielides said an explosion was heard around the time the fire erupted late on Wednesday. He told Reuters the fire, which was put out by BP's firefighters, appeared to have started in a compressor the size of a large room.

Trade and industry sources said the fire was confined to a hydrotreater for a gasoline-producing fluidic catalytic cracking unit (FCCU). Hydrotreaters, which use hydrogen to reduce sulfur in motor fuels, normally have compressor equipment.

BP has not said which unit was affected by the blaze, but said it was on the north end of the refinery.

There are two FCCUs at the refinery and two hydrotreaters. One hydrotreater has a capacity of 105,000 bpd and the other 100,000 bpd. It was unclear if both FCCUs can get by with just one hydrotreater. One of the FCCUs has a capacity of 110,000 bpd and the other can process 65,000 bpd.

One worker was taken to an area hospital for treatment and then released, the company said after the two-hour blaze.

BP said operations "were minimally impacted as a result of the incident and the refinery continues to produce products for customers."

Genscape, an energy information service, said all monitored units were operating normally except for the Blending Oil Unit, which shut at 9:04 p.m. on Wednesday. That unit removes sulfur from distillate and gas oil streams, according to Genscape.

In March, several barrels of oil leaked from the refinery into Lake Michigan.

Accidents, including small fires, at refineries are reasonably common, said Daniel Horowitz, the managing director for the U.S. Chemical Safety Board. The Board, which investigates larger refinery fires, drew that conclusion after a report into a fire at a Chevron (CVX) refinery.

The CSB will follow-up with BP, but is unlikely to investigate a case that doesn't involve fatalities or offsite damage, Horowitz said.

The Whiting refinery is the seventh-largest refinery in the United States and the largest outside of the Gulf Coast.

The plant is the centerpiece of BP's shift over the past two years to emphasize using cheaper, heavy crude oil from Canada's tar sands fields in Alberta.

In November, BP completed a revamp of the refinery to boost its intake of Canadian crude from 85,000 bpd to 350,000 bpd.

On July 29, BP's Chief Executive Bob Dudley said Whiting had been refining 270,000 bpd in heavy crude oil in the second quarter of this year and could likely run up to 300,000 bpd.

In 2005, an explosion at a BP refinery in Texas City, Texas, killed 15 people. The company later sold that refinery.

(By Michael Hirtzer; Additional reporting by Erwin Seba, Kristen Hays and Jessica Resnick-Ault; Writing by Terry Wade, Editing by Meredith Mazzilli and David Gregorio)