Wednesday, Sep 28, 2011

(Adds comments from Shell executive.)

SINGAPORE (Dow Jones)--Royal Dutch Shell PLC (RDSB.LN) has shut a hydrocracker unit at its 500,000-barrel-a-day refinery in Singapore as a precautionary measure after a fire broke out at the plant, the chairman of Shell Companies in Singapore said Wednesday.

At least six Shell firefighting staff suffered "superficial" injuries as the fire intensified late in the evening, and they were under observation, Lee Tzu Yang told reporters at a press conference. The fire was still burning, he said.

Pictures of the refinery fire in a local media website showed dark plumes of smoke billowing from the facility.

The giant refinery is Shell's largest globally and the incident could have a widespread impact on the regional oil markets if output is affected for a prolonged period. The refinery comprises nearly a third of the total processing capacity in the global oil storage and trading hub of Singapore. For now, the crude distillation units at the refinery were operating in a "stable state" and there was no damage to the hydrocracker, Yang said.

He said the company had sufficient inventories and the incident won't affect the gasoline and gasoil supplies in the City-State. If required Shell will seek volumes from its affiliates in the region to meet its wider supply commitments.

The fire broke out at about 1.15 local time at an open area in the refinery where several oil product pipelines are located, and intensified as firefighters tried to control the blaze.

"In the process of fighting the fire at the Pulau Bukom manufacturing site, it has spread," a spokeswoman for the company said in an emailed statement earlier.

The facility at Pulau Bukom is also home to an 800,000-ton ethylene cracker, which was also operating normally, Yang said.

Before news of the fire intensifying came out, several Singapore traders said its impact didn't appear to be serious for now. "Front spread was being offered by Shell, but it has gone to bid again. So maybe it's not too serious," a Singapore-based Western crude trader said.

Exxon Mobil Corp. (XOM), PetroChina's (PTR) Singapore Refining Co. and Shell each own and operate a refining complex in Singapore. The three refineries are capable of processing a combined 1.4 million barrels a day of crude oil.

-By Chee Yew Cheang and Gurdeep Singh, Dow Jones Newswires; 65-6415 4064; gurdeep.singh@dowjones.com

(END) Dow Jones Newswires

28-09-11 1635GMT