ExxonMobil Baytown at reduced rates: Update 4

Adds market impact.

ExxonMobil's 557,000 b/d refinery in Baytown, Texas, is operating at reduced rates following an explosion and fire on a desulfurization unit that injured four workers.

The fire broke out around 2am ET on 23 December on a unit that processes gasoline components, according to the company. Hours earlier refinery workers found a leak in a bypass line on the desulfurization unit, according to a report to state regulators, which led to flaring. Refinery crews lowered pressure on the leak location and put a repair plan into action to isolate the leak, according to the filing.

While outright prices in US Gulf coast distillates markets continue to rise on higher futures prices, no obvious effect was observed in spot markets today from the incident.

Regional ultra-low sulfur diesel (ULSD) cash differentials rose by 0.23¢/USG today, with a single trade confirmed at February Nymex -5.25¢/USG. ExxonMobil Baytown was not heard in any trades for naphtha.

The Harris County Sheriff's Office described the event as "some type of explosion" early in the day. The fire was extinguished around 10:30am ET and air quality monitoring is ongoing along the fenceline, ExxonMobil said.

The Baytown complex also houses petrochemicals operations — it has 1.13mn t/yr of propylene capacity spread across an olefins cracker and the refinery and 3.82mn t/yr of ethylene capacity at the olefins unit, along with associated downstream elements.

By Dylan Chase and Jason Metko