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Operations continue with crude oil unit down at Citgo’s Lemont refinery

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Updated: November 26, 2013 6:23AM



The blaze Wednesday night at the Citgo oil refinery in Lemont may have hampered its ability to process crude oil, but operations continue and at least one analyst says the fire is not expected to affect the prices motorists pay for gasoline.

The fire was contained to the refinery’s crude unit, which is a primary point of operations because it feeds crude oil to other units that refine the oil into gasoline.

With the crude unit down, Citgo cannot bring in more oil to be made into gasoline, but the plant can continue to produce gasoline from oil that was processed before the fire. Citgo issued a statement Thursday morning, saying the refinery is operating, but it does not know when the crude unit will be back in service.

“The refinery operations have been significantly reduced, but we do have some downstream units still in operation,” the statement says.

No one was hurt in the fire, which sent flames shooting high into the night sky along with massive plumes of smoke that were seen for miles.

The fire started about 7:40 p.m. in the crude unit, which was immediately shut down, according to a statement from Citgo spokesman Pete Colarelli, who said Citgo’s fire department and firefighters from nearby suburbs helped bring the fire under control. He said the cause of the fire had not been determined as of Thursday.

The refinery operation covers land in Lemont, unincorporated areas nearby and parts of Romeoville.

The primary market served by the refinery is the Chicago region, although it supplies gasoline to other states in the Midwest, Colarelli said. He said the 520 employees will stay on the job while the crude oil unit is under repair.

One analyst said the Citgo fire had an immediate impact on markets but would not increase prices at the pump.

“The refinery fire is affecting how far gas prices will drop,” said Patrick DeHaan, senior petroleum analyst at gasbuddy.com.

Spot prices in gasoline trading were up 11 cents a gallon Thursday morning, he said, but wholesale prices had dropped more than 20 cents during the previous three days, and that price decline had yet to be factored into retail prices before the fire.

“Motorists will likely not realize any increase at all,” DeHaan said. “Prices might have dropped 15 cents over the next two weeks. Now, they might drop five cents.”

He said Illinois, Indiana and Wisconsin gas prices will be most strongly affected by the reduced output from the Citgo refinery, which has the capacity to refine more than 7.5 million gallons a day.

The impact of a Citgo shutdown is less severe because of recent upgrades at refineries in the Chicago area and elsewhere in Illinois, said Jim Watson, executive director of the Illinois Petroleum Council. The Exxon Mobil refinery in Channahon and BP refinery in Whiting, Ind., have expanded production capacity, he said.

“You’re in the fortunate position that you have several refineries in the area that have done significant upgrades and increased capacity,” Watson said.

As for the fire’s effect on nearby residents, no one was hurt and there were minimal complaints about the smoke.

Harold Damron, director of the Will County Emergency Management Agency, said there was little impact from the smoke because winds carried it “quite high in the air.” Still, EMA workers monitored the air past midnight, which was a couple of hours after the fire was extinguished, he said.

The Will County EMA received one call from a person saying the smoke was irritating. All other calls were for information about the fire. Damron noted that the closest house to the crude oil unit is about three-quarters of a mile away.

One reason the fire was so intense was that it continued to be fed by crude oil until refinery crews were able to cut off the supply, Damron said.

“They were trying to stop the fire, cut off the fuel to it,” he said. “They were able to do that within a couple of hours after the start of the fire. After that, it was a matter of letting the remaining product burn off.”

Meanwhile, at a subdivision less than a mile away, residents said they did not smell the smoke from the fire, although it was apparent that the night sky was darker than usual.

Joe Gibbons, who lives on Old Orchard Lane, said he did find some interesting debris in his back yard Thursday morning. Gibbons showed a reporter a piece of aluminum and what appeared to be shreds of insulation that he believed came from the fire.

“It was lying in my back yard,” he said, adding that he had mowed the grass a couple of days earlier and the debris was not there.

Gibbons said he heard a “boom” from the refinery but did not know what had happened until he got a call from his son, who lives farther away.

“He called and said, ‘what’s the big cloud over your house?’” Gibbons said.

Contributing: Mitch Dudek
and Leeann Shelton



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