IRPC plant damage put at Bt480m or more

Corporate June 11, 2014 00:00

By Watcharapong Thongrung
The Na

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Cause of fire, blasts likely to be equipment-related; facility to partially shut for 3 months

IRPC estimates the damage from a fire and two explosions at its oil-and-gas filtration plant in Rayong province at 6pm on  Sunday to be at least Bt480 million. 
The company said the cause of the incident was likely equipment-related rather than human error. The plant will have to be closed for about three months for repairs, causing loss of revenue of about Bt160 million per month. 
According to IRPC president Sukrit Surabotsopon, hydrocarbon leakage probably caused the explosion at the vacuum gas oil hydro treating (VGOHT) unit. 
The company said an in-depth investigation into the cause of the accident would take about two to three weeks.
 IRPC has US$1.2 billion (Bt39 billion) in property casualty insurance, which covers property damage as well as business interruption. The insurance policy requires that IRPC absorbs the initial $5 million in property damage, while the insurer will cover the rest. 
Total losses from this are considered to be the worst in the past 25 years of IRPC operations. 
IRPC was able to extinguish the fire within one hour, and there was no report of injuries.
The company sent staff to check the air quality after the explosion to assure residents in the vicinity that it is within the safety standards of the Pollution Control Department. In addition, the company was to send its medical unit to provide free health check-ups for residents in the surrounding area at 9am today. 
The company is ready to take responsibility for adverse health impacts and/or property damage to the local residents, Sukrit said. 
Meanwhile, IRPC says it has taken additional steps to prevent similar accidents in the future via a work-safety system, which will take two or three years to be implemented fully.
Total closure sought 
An anti-global-warming group has urged the military’s ruling National Council for Peace and Order to instruct the Industry Ministry’s Department of Industrial Works to shut down the entire IRPC petrochemical operation to ensure the safety of local residents. 
And the governor of Rayong province, Thanee Samartkij, has signed an order to shut down the petrochemical plant for 90 days. 
The department is inspecting the site of the accident to see if it is necessary to shut down the entire plant or just the affected area, as a full shutdown would have a considerable adverse impact on the country and loss of revenue for IRPC. This is because IRPC refines up to 29 million litres of oil per day, or about 10 per cent of the national total. This comprises 6.5 million litres of diesel fuel and 2.3 million litres of petrol per day. A shutdown of only the VGOHT unit would result in a reduction of 1.3 million litres per day of each of those fuels. 
Shutting down the VGOHT unit would also affect the production of propylene, as this unit provides feedstock to the cracker mainly to produce propylene, which is use to make plastic. Propylene output could fall by 360 tonnes a day, Sukrit said. 
However, if the Department of Industrial Works allows IRPC to resume operations of its deep catalytic cracking unit, which is next to the VGOHT unit that exploded, the company will get back at least 60 per cent of its full production capacity, he added.
The department’s deputy director-general, Sakso Phanklar, said he had received instruction from the director-general to inspect the site of the explosion and fire at IRPC’s petrochemical plant today along with the press. However, IRPC is being restricted in complying with this order because of insurance and safety assurance for the visiting journalists. 
The department will advise local residents on how to seek legal compensation for any damage they may have sustained. 

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