Essar Oil has been fined £1.65 million over a “major explosion” at Stanlow Oil Refinery after a court heard it was “fortuitous” not to have not injured anyone.
Liverpool Crown Court heard yesterday that staff at the Ellesmere Port refinery were “running for their lives” as a “massive explosion happened behind them” at 2.06am on November 14, 2013.
In March last year the company pleaded guilty to one count of failing to take all measures necessary to prevent major accidents after three failures by staff led to the explosion and a subsequent fire.
Richard Bradley, prosecuting for the Health and Safety Executive (HSE), told the court the explosion was “entirely preventable and occurred because Essar did not take the necessary measures to prevent the explosion”.
Mr Bradley said the explosion happened in a furnace connected to a fractal distillation column – the process of turning crude oil into more useful bi-products, such as petrol.
Stanlow Oil Refinery, the second largest in the UK, runs continuously for three to four years before there is a shutdown for maintenance and cleaning over the course of a few weeks. Stanlow was in shutdown in October 2013.
Mr Bradley said that during this maintenance period staff decided that a three-way valve needed replacing which was “safety critical”.
He said the valve was in furnace 202 and would operate by expelling exhaust gases into the furnace to be burnt off. When the furnace was not in operation the valve would vent the gases into the atmosphere.
Mr Bradley said when the valve was installed originally, in 1970, it was noticed by staff at the time that the valve was supplied the wrong way around so they installed it in the opposite direction so it would work as intended.
When the staff replaced the valve they ordered the same valve as previously and installed it as supplied, which meant that it was venting the exhaust gases in the wrong direction.
Mr Bradley said the previous valve had been in use for 40 years and had been maintained and inspected.
“It was completely inappropriate to order a safety critical valve by merely referring to its serial number,” he said. “The order should have included a design specification.
“The fact this was not noticed is a serious and basic failure on the part of Essar.”
Mr Bradley said after it was installed the inspections carried out on the valve were “inadequate” because they failed to spot that it was not in the right direction.
The second “major failing” which contributed to the cause of the explosion was that a new valve, installed as an extra safety feature on a fractal distillation column, was put in the wrong place so it had no effect.
Mr Bradley said the new valve, which was installed during the site shutdown, was put in place by staff after an accident at a Texas oil refinery when a fractal distillation column had overfilled.
The purpose of the valve was to trip when the column was filled to 90 per cent capacity. However, it was installed after a bypass pipe which meant that even when the valve tripped the column would continue to fill.
The third “major failing” was Essar’s failure to isolate fuel lines to the furnace which exploded.
Mr Bradley said these three errors culminated when the refinery was started up again after its maintenance period. On November 13, starting at 3am, staff started to fill the fractal distillation column connected to furnace 202.
Because the trip valve was not installed correctly the column continued to fill despite being over 90 per cent full with naphtha, which is similar to petrol.
The column eventually overfilled and the naphtha liquid entered the exhaust gas system connected to furnace 202.
This system should not have been open at the time to prevent an inadvertent release of fuel into the furnace, but it was.
The naphtha eventually reached the three-way valve which had been installed incorrectly which then fired the naphtha into the furnace which was immediately ignited.
Mr Bradley said if this valve was installed correctly the outcome would have been to spray the naphtha into the site which could have led to a fire in any event.
Mr Bradley said the furnace was operating at 900C and the ignition point of the naphtha was 40C.
The major explosion occurred at 2.06am.
Mr Bradley said it was “fortunate” no-one was in the immediate vicinity of the explosion and the fact that nobody was injured was “entirely fortuitous”.
Mr Bradley said the explosion was a “catastrophic failure caused by very serious management failures”.
He said Essar had previous convictions for breaching environmental law on two separate occasions – once for releasing petrol into the Manchester Ship Canal and once for a minor explosion which sprayed most of Ellesmere Port with a film of oil.
Defending, Michael Hayton QC said Essar had taken the court process “extremely seriously” and had co-operated with the HSE throughout.
He said the explosion occurred because “individuals, some with decades of experience, did not do what they should have done, inexplicably”. Mr Hayton said an HSE report said management systems “were in place” and he rejected the prosecution suggestion that there was a failure of management.
He said two of the three failures had arisen out of the management “trying to further improve the system” but that “unfortunately these were poorly implemented”.
He added the company also had a policy in place to make sure that as few people as possible were in the vicinity of the refinery when it was being turned back on.
He said while Essar accepted that staff were “exposed to a high degree of risk of harm” it was “one or two” because of the company’s policy.
Mr Hayton said Essar met with HSE on a monthly basis and there had been no previous warnings or prosecutions from HSE.
He said Essar aimed to “go beyond minimum standards” and had won a number of industry awards for their health and safety.
The only other reportable incidents at the site were a broken foot in a workshop accident and a person who fell off their bike on site.
He added: “This is a good company run well, ordinarily, which has fallen foul of its own procedures in November 2013.
“This is a company which is operating this site to global top level standards.”
Sentencing, Mr Justice William Davis said the company had a “good safety record” but added this incident could have “easily” resulted in a loss of life.
He said: “One of those closest to the explosion was aware of the relevant furnace shaking violently and he and a colleague ran from the scene quite rightly thinking they were running for their lives.”
He added the reason the explosion happened was “ironically” that the plant was trying to make safety improvements but he criticised “inadequate training” of staff although steps had been taken to improve training since the incident at the refinery
He fined Essar a fine totalling £1,650,000 and ordered the company to pay prosecution costs of £57,400.80.
The health and safety executive (HSE) have issued a warning to the oil industry after the hearing.
Joanne Eccles, spokesman for HSE, said that the industry should “take notice” of Essar’s conviction at Liverpool Crown Court after the explosion in 2013.
She said: “After a through investigation Essar Oil UK pleaded guilty to the offence and the court have acknowledged the failing and have sentenced accordingly.
“The industry should take notice of the case. The control of major hazard regulations exist for good reason. People's lives can be put in danger by hazardous activities and it is imperative the industry takes its responsibilities seriously.
“Fortunately in this case there were no injuries but the industry should take notice of this case and learn from it as mistakes were made.”
After the hearing an Essar Oil UK, spokesman Ian Cotton, said the company took the matter seriously.
He said: “We made clear to the courts from the outset that we accepted responsibility for the incident.
“We take this matter very seriously. Following the incident in November 2013, meaures were put in place to ensure it could not happen again.
“No one at Stanlow was hurt and there were no effects on the general public off-site.
“Although the incident happened three and a half years ago, new sentencing guidelines introduced in February 2016 significantly increased the penalties previously available to the court which has been reflected in the size of the fine levied today.”