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Power loss forces bp to shut biggest U.S. Midwest refinery

(Reuters) - bp was purging its 435,000-bpd Whiting, Indiana, hydrocarbon refinery after a transformer failure caused a plant-wide power outage and forced an evacuation of all but the most essential workers, said people familiar with plant operations.

It is not yet clear how long it will take bp to restart the refinery, which is the company's largest in North America and the biggest in the Midwest, said the two sources, who were not authorized to speak publicly.

bp said the refinery shut down following an apparent power outage, which forced employees to evacuate office buildings.

"We have activated our emergency response team," the company said in a statement.

News of the Whiting refinery outage, which occurred at midday, pushed up gasoline and diesel price in the area on fears of tighter fuel supply, and cut Canadian crude prices on worries of lower demand.

Late on Thursday afternoon, bp began sending nitrogen into some of the units to purge hydrocarbons from them as others continued to burn off hydrocarbons through the refinery safety flare system, the sources said.

Flaring burns off volatile hydrocarbons that cannot be processed normally because of a shutdown. Without flaring, the hydrocarbons could cause a fire or explosion.

While a refinery as large and complex as Whiting could resume operations within a week, restart times can vary widely following power outages, said John Auers, managing director of Refined Fuels Analytics.

"Restarting depends on how quickly you can restore power and if you have any damage," he said.

"You can manage power outages but its very complex. You don't have instrumentation when you lose power, so you don't know what's going on in the units," Auers added.

The sources said the evacuation was the largest they had seen in years at that plant, which is located next to Lake Michigan and 20 miles (32 km) southeast of downtown Chicago.

"They heard a loud pop and then there was the power failure," one of the sources said.

The Whiting refinery was previously shut by an Aug. 24, 2022 fire in a single electrical line that also knocked out the plant's cooling water supply. It took a week and a half to restart the refinery after that fire.

Chicago gasoline and diesel cash differentials jumped between 15 and 20 cents in late Thursday trading to 30 cents per gallon below the gasoline and diesel benchmarks, respectively, on the New York Mercantile Exchange.

Western Canadian Select (WCS) for March delivery, which settled at $18.10 a barrel under West Texas Intermediate (WTI) on Wednesday, was sold off on the Whiting news and settled at $19.00 a barrel under WTI, according to brokerage CalRock.

WCS prices at the Cushing, Oklahoma storage hub eased 25 cents, while those at Houston fell 30 cents, according to data from price provider General Index.

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