marsh 2009 100largestlosses

Global Energy Practice

The 100 Largest Losses 1972 – 2009

Large Property Damage Losses in theHydrocarbon Industries

Title Goes Here

The 100 Largest Losses Marsh’s Energy Practice

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Table of Contents

Foreword .......................................... i

Introduction ................................... iii

The overall 20 largest losses .......... v

Refineries ........................................ 1

Petrochemical Plants ................... 11

Gas Processing Plants ................... 17

Terminals/Distribution .................. 20

Upstream ....................................... 22

Acknowledgement

Marsh’s Energy Practice acknowledges the significant input from various sources interested in the prevention, mitigation, and analysis of large property damage losses that make this publication possible. We will continue to rely in good faith on information provided from interested professionals as well as published sources, and to encourage readers to bring errors, omissions, or additional information to our attention.

Additional copies of this publication are available through the worldwide offices of Marsh’s Energy Practice and on marsh.com.

Foreword

The 100 Largest Losses Marsh Energy Practice

i

Welcome to the 21st edition of Marsh’s ‘100 Largest Losses’! Over the decades, we have provided the hydrocarbon and chemical industries with this concise and unique summary of impactive and sometimes catastrophic losses in their respective spheres of influence. By accessing, in good faith, all publicly available data points, and in many cases by working directly with affected companies, we have done our utmost to faithfully summarize the key facts surrounding these events.

As risk management techniques grow increasingly complex, and oil, gas, and chemical companies continue to seek new ways to manage total cost of risk, it has become even more imperative to have a firm grasp on the nature of operational losses that have historically occurred. Indeed, when planning ahead, one step involves looking back to the future. No one who has been in these industries for very long would ever say “that will never happen again!”

The Marsh Energy Practice has committed resources and time to producing this valuable publication because risk management has evolved into an applied science requiring sophisticated tools. We’ve written ‘100 Largest Losses’ to provide our readers with a valuable instrument for their risk management toolboxes.

Our job is to relentlessly push our colleagues to deliver unique risk management solutions to oil, gas and chemical companies. In spite of the many advances we have made, we will never rest in this endeavor. Our interests are those of our clients. At Marsh, we are not embarrassed by making our priorities very clear. We exist to serve the risk management interests of our clients.

I very much hope that you find this report to be informative, thought provoking, and of tremendous use in your professional endeavors. As always, the Marsh Energy Practice stands by ready to provide whatever assistance you require.

All the Best,

James R Pierce, Jr. Chairman, Energy Practice

I would like to record my thanks to all those un-named individuals who have helped with this publication in addition to the major contributors identified, as tracking down even basic information can sometimes be very challenging.

Introduction

iii

This twenty-first edition reviews the 100 largest Property Damage losses that have occurred in the hydrocarbon processing industries since 1972. This review used our Energy Losses Database as well as information available from several other sources. The Marsh Energy Losses Database contains nearly 8,000 records for the period from 1972 through 2009. Whilst there are still some losses for which we have not got even a basic understanding of what went wrong, the growth of modern information systems such as the internet have provided us with opportunities to more easily find information on loss events, and even watch recorded video.

Although nearly all of the losses involved fires or explosions, many have occurred as the direct result of floods, windstorm , and pressure vessel rupture related events. We have not included the consolidated losses across the oil, gas, and petrochemical industry from single natural peril events such as Hurricane Katrina where multi-billion dollar losses in total have been reported. Marine transportation losses are excluded, except for those involving marine vessels moored at plant docks. All financial loss data is estimated, and is presented to two significant figures.

The large property damage losses have been grouped by type of facility into five categories: Refineries, Petrochemical Plants, Gas Processing Plants, Terminals/Distribution, and Upstream. The 100 largest Property Damage losses analysed in this edition are across all of these categories, and represent approximately USD 30 billion in property damage, stated in December 2009 dollars. Based on available data, we attempt to state dollar losses on the basis of cost to repair or replace assets damaged or destroyed in ‘money at the time’. The loss amounts include property damage, debris removal, and cleanup costs while the costs of business interruption, extra expense, employee injuries and fatalities, and liability claims are excluded from this analysis. The direct, on-premises cleanup costs due to asbestos abatement, PCB removal, or released hydrocarbons and chemicals following a fire, explosion, or other loss event have traditionally been considered part of the property damage loss. These costs, to the extent insurance is applicable, are paid by property insurance underwriters. The loss amounts are then inflated using the Nelson-Farrar Petroleum Plant Cost Index, thus allowing for

a comparison of events on a constant dollar basis across the period analysed, and then sorted into decreasing magnitude.

Over one third of the 100 largest property losses have occurred since the publication of the last edition of this report in 2003, mirroring the trend towards consolidation and the building of larger, more operationally cost effective, new facilities whilst existing facilities continue to age. The more traditional causes of incidents remain.

Much has been written about learning from incidents and accidents within the oil, gas and petrochemical industry, and there are plenty of papers and articles on the lessons to be learnt from the many significant incidents that have occurred in the past. Indeed, it is often said that there are no new incidents and, whilst this cannot be strictly true, there are many examples where learning points from incidents have been well documented and shared, but appear to have never been implemented comprehensively elsewhere. Further incidents happen, and the lessons are documented again, only for the cycle to be repeated. Examples of some of these types of incidents can be found in some of the losses detailed in this publication.

Marsh believes that there are a number of factors that may influence how well the industry learns from its previous mistakes:

n Distance and Time: Distance from the original incident, and elapsed time since the event appear to be two of the factors influencing how well lessons from major incidents are learnt. As we move further from the original incident (and

Editor: Iain Clough (CEng, FIChemE, MIOSH) [email protected] Marsh Global Energy Risk Engineering, London

Contributors: Ilya Mamonov Jonathan Carter


5

sometimes not too far), and wait longer after the incident occurs, the less likely we see the lessons learnt and improvements made to help stop the incident recurring.

n (Not) Learning from positive results: There are a number of good examples of where the industry does appear to have learnt from incidents, and has made improvements on a global basis. However, in general, we do not appear to be very good at learning from positive results, even where these have been incorporated into international standards. This is perhaps because if there is a positive result, it does not make the Chemical Engineering press, and has a much lower profile within the company as the loss is generally smaller. Because of these factors there is much less analysis done of what went well. In general, however, learning such as this is incorporated within national and international standards, all that engineers then have to do is apply it. We can also benefit from looking outside our own industry here, perhaps examining the nuclear and aviation sectors.

n Cultural challenges: It is possible that there may be a number of cultural barriers to learning from these major incidents. Kletz, (Kletz, T, 1993, Lessons from Disaster, IChemE), identified time, lawyers (and litigation), fear of adverse publicity, internal procedure, disclosure of confidential information, and commitment (of both companies and individuals) as barriers to publicising incident information, but this is a very western-centric viewpoint. Much of the growth in the Energy industry is happening in the Middle East, Asia, and Africa, and there are a number of relatively young, fast growing and now quite large, companies with significant assets. However, these companies have not been around long enough (or may have been around, but have recently grown from a much smaller base) to have heard about some of the incidents described in this publication and elsewhere.

We would all benefit from a reduction in incidents, from the catastrophic to the minor, and we commend this publication to you to promote discussion and learning within your teams.

100 Largest Losses

The overall 20 largest losses


v

Date Plant Type Event Type Location Property Loss US$ million*

07/07/1988 Upstream Fire/Explosion North Sea UK 1600

23/10/1989 Petrochem Vapour Cloud Explosion Texas USA 1300

19/03/1989 Upstream Fire / Explosion Gulf of Mexico USA 750

12/09/2008 Refinery Hurricane Texas USA 750

04/06/2009 Upstream Collision North Sea Norway 750

23/08/1991 Upstream Structural Failure Sleipner, North Sea Norway 720

15/05/2001 Upstream Explosion / Fire / Sinking Campos Basin Brasil 710

25/09/1998 Gas Processing Vapour Cloud Explosion Victoria Australia 680

15/04/2003 Upstream Riot Escravos Nigeria 650

24/04/1988 Upstream Fire Campos Basin Brasil 640

21/09/2001 Petrochem Explosion Toulouse France 610

25/06/2000 Refinery Vapour cloud explosion Mina Al-Ahmadi Kuwait 600

04/05/1988 Petrochem Explosion Nevada USA 580

19/01/2004 Gas Processing Fire / Explosion Skikda Algeria 580

05/05/1988 Refinery Vapour Cloud Explosion Louisiana USA 560

01/11/1992 Upstream Mechanical Damage North West Shelf Australia 470

14/11/1987 Petrochem Vapour Cloud Explosion Texas USA 430

25/12/1997 Gas Processing Fire / Explosion Sarawak Malaysia 430

27/07/2005 Upstream Fire / Explosion Mumbai High field India 430

20/01/1989 Upstream Blowout North Sea Norway 410

* Inflated to December 2009 values

Note: In the following tables, the figures in bold represent the loss value inflated to December 2009 US dollars, with the first mentioned figures being the originally reported loss.

Refineries


1

Five year loss totals in the refinery industry have continued to trend upwards over the last few years. Piping failures or leaks (corrosion or incorrect metallurgy) and start-up and shut-down events continue to be significant causes.

Refinery losses in five year periods

0 500 1000 1500 2000

2005 - 2009

2000 - 2004

1995 - 1999

1990 - 1994

1985 - 1989

1980 - 1984

1975 - 1979

US$ millions

Refineries


2

This 562,000 bbl/d refinery was shutdown prior to Hurricane Ike, with damage due to flood

and windHurricane

12 September, 2008

Texas, USA

$750,000,000 $750,000,000

An explosion at this 70,000 bbl/d oil refinery caused damage to the FCC, utilities, storage

tanks and asphalt unit. One employee was hospitalised for burns. Another person was

apparently injured when her car was struck by debris on the nearby highway. A skeleton

crew of just 40 people were on site because of a public holiday. There are typically about

four times as many people on duty at the time of the explosion. The fire was brought

under control the same day by the site fire brigade supported by local fire departments.

The release is believed to have occurred during a start up on the propylene splitter unit

following catastrophic failure of a pump. The source of ignition is not known. Some

processing resumed about 2 months later and the FCC recommissioned some 8 months

after the incident.

Fire / Explosion

18 February, 2008

Texas,USA

$380,000,000 $380,000,000

A fire broke out in a Crude unit at 14:15, but was under control by 16:00, though it was

reported to be still burning at 20:30. No injuries were reported. Company officials said a

‘major portion’ of the plant continued to operate. The fire was at the No 2 Crude unit at

Pascagoula, and the No 1 Crude unit at the refinery remained operational. The 325,000

bbl/d Pascagoula refinery had been operating since 1963.

Fire / Explosion

16 August, 2007

Pascagoula, Mississippi, USA

$200,000,000 $230,000,000

The fire on the Vacuum distillation unit caused the main Vacuum distillation column to

collapse onto the heat exchange train. The unit was shutdown completely and the refinery

was left running at a much reduced capacity. The fire was caused by a leak from a branch

on the column fabricated from some incorrect material.

Fire / Explosion

12 October, 2006

Mazeikiu, Lithuania

$140,000,000 $180,000,000

Fifteen people were killed and 105 injured following an explosion at the 460,000 bbl/d

refinery. The explosion occurred in the Isomerisation unit which had been shutdown for

its annual major maintenance. This unit was gradually being brought back on stream

when the incident occurred. Further investigations concentrated on a Raffinate splitter as

evidence pointed to a release of a flammable liquid and vapour in that area of the plant.

The distillation equipment was also being restarted following maintenance work on the

reactor. Many of the dead had been attending a meeting in a pair of trailers near the

area at the time of the explosion. The exact ignition source remains unknown but evidence

points to sources on the ground. Witnesses reported that there was a large hydrocarbon

liquid and vapour release from a 30 m high vent stack moments before the ignition.

Fire / Explosion

23 March, 2005

Texas, USA

$200,000,000 $270,000,000

A fire broke out at this Oil Sands Refinery in Upgrader 2, an area of the plant that converts

bitumen into crude oil products. Some 250 people were evacuated from the plant and no

injuries were reported. The fire burned for nine hours before being extinguished. Witnesses

reported two explosions minutes apart which sent a fireball six storeys high into the air.

The plant also suffered ice damage from water used to fight the fire as temperatures in

the area fell below -35 °C. On 03 February 2005 the company announced that a ruptured

Cycle line was the most likely cause of the fire. Oil production was reduced from 225,000

bbl/d to about 110,000 bbl/d for about nine months.

Fire / Explosion

04 January, 2005

Fort McMurray, Alberta, Canada

$120,000,000 $160,000,000

A Magnitude 8 earthquake at a depth of 33 km caused sloshing between the floating roof

and side wall of a Crude oil tank and is believed to have caused this fire. The Crude oil tank

contained 189,000 barrels. Firefighters spent 7 hours controlling the blaze, and the refinery

was shut down.

Earthquake

26 September, 2003

Tomakomai, Hokkaido, Japan

$90,000,000 $140,000,000

Refineries


3

Following torrential rain rising floodwater allowed waste oil floating on the surface to be

brought into contact with hot equipment on the refinery causing explosions and a fire.

A second blaze broke out and several storage tanks reportedly caught fire and exploded.

Damage to the refinery was extensive and two were killed with a further three reported

missing. Later reports said that two or three production units had been affected by the fire.

The processing units affected were the Crude unit, the 20,000 bbl/d Vacuum Distillation

unit, the 24,000 bbl/d Catalytic Reformer unit and the 24,000 bbl/d Distillate Hydrotreater.

At the time it was stated that the units not affected by the fire would restart within fifteen

days although the other units would not be operational for a further eight to twelve

months.

Fire / Explosion

22 November, 2002

Port of Mohammedia, Morocco

$130,000,000 $180,000,000

The 200,000 bbl/d refinery was shutdown after a leakage was found at the main Crude

Distillation unit. The whole refinery was shut in order to repair a damaged heat exchanger

at the Crude Distillation unit, which resulted in crude oil contamination of the naphtha

product streams. There was a minor fire on a non-associated unit during the site shutdown.

Product Contamination

07 February, 2002

Shuaiba, Kuwait

$150,000,000 $210,000,000

The refinery, which produces 160,000 bbl/d of gasoline and distillates, was shut down

due to a fire in the Crude Distillation unit. Three days later the distillation tower suffered

a structural failure due to corrosion issues compounded by the fire. The Crude Distillation

unit was shut down for six months.

Fire

14 August, 2001

Lemont, Illinois, USA

$145,000,000 $210,000,000

A piping leak resulted in a fire in this refinery Coker unit. Smoke rose to over 3,000 feet,

and the Coker was shut down for approximately two months.Fire

23 April, 2001

Carson City, California, USA

$120,000,000 $170,000,000

An oil spill occurred due to a failure of a block valve to seat properly during maintenance

on a pump strainer in the Visbreaker unit. The oil auto-ignited and the ensuing fire spread

and destroyed the Visbreaker and damaged adjacent equipment. Subsequent explosions

and heat restricted fire fighting access, and inadequately trained fire brigade personnel, and

damage to the firewater distribution system, further hindered extinguishing the fire in a

timely manner. The fire was spread by the firewater application, and was extinguished with

the help of the local fire department.

Fire

09 April 2001

Wickland, Aruba, Dutch Antilles

$160,000,000 $230,000,000

The explosion occurred when employees were attempting to isolate a leak on a condensate

line between the NGL plant and the refinery. Three Crude units were damaged and two

Reformers were destroyed. The fire was extinguished approximately 9 hours after the initial

explosion. Five people were killed and 50 others were injured. The initial investigation into

the loss indicated a lack of inspection and maintenance of the condensate line, which was

not owned by the refinery. Confusion caused by the ownership issue is also thought to

have delayed the isolation of the line.

Fire / Explosion

25 June 2000

Mina Al-Ahmadi, Kuwait

$410,000,000 $600,000,000

An earthquake measuring 7.4 on the Richter scale caused a collapse of a 312 feet high

concrete chimney on one of the Crude units, setting off fires at this 226,000 bbl/d

refinery. Fires also broke out on a number of storage tanks on the site. The process teams

successfully isolated and tackled the Crude unit fire. Fires on the tank farm were allowed

to burn themselves out after storage tanks were pumped out as much as possible. Due

to broken water mains, fire fighting efforts were limited to attempts by aircraft to drop

chemicals on the fires. The United States and many other countries sent foam supplies,

personnel and equipment to fight the fires. Damage to the refinery included total loss of

six storage tanks, a further four storage tanks were deformed, and there was some 50 %

damage to other floating roof tanks. Damage to process units included the fire on the

Crude Distillation unit, and damage to a Reformer and several connecting pipelines.

Earthquake

17 August 1999

Korfez, Gulf of Izmit, Turkey

$200,000,000 $300,000,000

4

The explosion was caused by the failure of a valve bonnet in a high-pressure section of

a 60,000 bbl/d Hydrocracker. A vapour cloud formed from the release, ignited, and was

followed by a large fire fed by escaping hydrocarbons at high pressure. The explosion

resulted in the collapse of a large section of pipe rack and destruction of a large fin fan

cooler mounted above the rack. Many pumps were destroyed and a separator was badly

damaged. Approximately 300 fire fighters and 33 fire trucks participated in the two and a

half-hour effort to control the fire. Foam concentrate consumed totaled 3,200 USgal. The

Hydrocracker was out of service for 12 months.

Explosion

25 March 1999

Richmond, California, USA

$110,000,000 $170,000,000

The entire refinery was shut down for three months after being struck by hurricane

Georges. The hurricane left the entire plant submerged under more than 4 feet of salt

water from the Gulf of Mexico. Although the hurricane was only a Category 2 storm, its

slow movement subjected the refinery to 17 hours of high wind and rain. The storm surge

overtopped the dikes built to protect the refinery. In all, some 2,100 motors, 1,900 pumps,

8,000 instrument components, 280 turbines and some 200 miscellaneous machinery

items required replacement or extensive rebuilding. Newer control buildings and electrical

substations sustained little or no damage as they had been built with their ground floors

elevated approximately 5 feet above grade.

Hurricane

01 September 1998

Pascagoula, Mississippi, USA

$190,000,000 $290,000,000

This event occurred on a Crude unit at this 360,000 bbl/d refinery. A furnace was

undergoing maintenance when a worker performed a hot cut and material was released.

Inadequate flushing and blinding, and a work scope that did not meet normal industry

practices appear to be likely causes.

Fire / Explosion

07 August, 1994

Ryazan, Russia

$100,000,00 $170,000,000

A severe thunderstorm passed over the refinery between 07:20 and 09:00 on 24 July.

Lightning strikes resulted in a 0.4 s power loss and subsequent power dips throughout the

refinery. Consequently, numerous pumps and overhead fin-fan coolers tripped repeatedly,

resulting in the main Crude Distillation column pressure safety valves lifting and major

process unit upsets in other refinery units including those within the Fluid Catalytic

Cracking (FCC) complex. The 90,000 bbl/d Cracking complex included the FCC unit,

Butamer unit, Alkylation unit, and an idle Hydrogen plant. The refinery Crude unit was

shut down following ignition of vapour escaping from the main crude column pressure

safety valves by a subsequent lightning strike. Except for the FCC unit itself, all other units

in the cracking complex were also shut down. However, a process upset in the FCC unit’s

gas recovery section ultimately led to a high liquid level in the on-plot flare drum and

several shutdowns of the wet gas compressor together with other process anomalies.

As a result of the Wet Gas compressor shutdown, there was a large vapour load on the

FCC flare system which lead to a high liquid level in the on-plot flare drum. When the

hydrocarbon liquid overflowed into the outlet line of this drum, the line ruptured due

to mechanical shock. A pulsing leak appeared at the flare drum discharge elbow where

the outlet line had ruptured and fell to the ground. The hydrocarbon liquid and vapour

mixture released from this flare system became an explosive mixture that drifted within the

process area prior to being ignited by a heater. The explosion, which occurred at 13:23 was

centered in the process area approximately 360 feet (110 m) from the FCC on-plot flare

drum.

Following the explosion, a number of isolated fires continued to burn at locations within

the FCC, Butamer, and Alkylation units. In view of the entrained hydrocarbons in damaged

areas of the plant and a non-operative flare system, these small fires were allowed to burn

out under controlled conditions with the last fire being extinguished on the morning of 27

July. The fire fighting was handled by the refinery emergency services with assistance from

the Dyfed County Fire Service.

As a result of this incident, an estimated 10 % of the total refining capacity in the United

Kingdom was lost until this complex was returned to service. The Business Interruption loss

for this incident was estimated at USD 70,000,000 at the time of the loss, which reflects

4.5 months of downtime.

Fire

24 July 1994

Pembroke, UK

$78,000,000 $130,000,000

Refineries


5

Operations were normal at this 136,000 bbl/d refinery when a vapour cloud explosion

occurred in the Gas plant associated with the 29,700 bbl/d FCC unit. The initial vapour

cloud explosion and several subsequent lesser explosions could be heard in Marseilles,

approximately 18 miles from the refinery. An estimated 11,000 lb of light hydrocarbons

were involved in the initial explosion.

At approximately 05:17 a gas detection system in the FCC unit sounded an alarm indicating

a major gas leak. While the unit operator was contacting the security service to warn of

this situation, the initial explosion occurred at approximately 05:20. The initial gas release

is believed to have resulted from a pipe rupture in the Gas plant, which is used to recover

butane and propane produced in the FCC unit.

The explosions and subsequent fires devastated about two hectares of this refinery,

which covers an area of about 250 hectares. The Gas plant, FCC unit, and associated

control building were completely destroyed by this incident. Two new process units

under construction which were scheduled to come into operation in 1993 were seriously

damaged. Outside of the refinery, roofs were damaged in the nearby town of Chateauneuf

les Martigues and windows were broken within a radius of 3,000’, with some broken

windows up to 6 miles away.

The refinery fire brigade and over 250 firemen from three neighboring industrial sites

and four nearby towns were utilised for more than six hours to bring this incident under

control. Approximately 37,000 USgal of foam concentrate were used during the fire

fighting effort. Some fires were intentionally left burning after the incident was under

control at 11:30 to allow safe depressurising of the process units since the flare system was

partially damaged by the explosions. All of the fires were extinguished by 17:30.

Vapour Cloud Explosion

09 November, 1992

La Mede, France

$230,000,000 $400,000,000

An explosion and subsequent fire resulted in significant property damage at this

146,500 bbl/d refinery. The explosion occurred following a heat exchanger failure in

the Hydrodesulphurisation unit for light oil. The channel cover and lock ring of this heat

exchanger were hurled into an adjacent factory, which was located approximately 650 feet

from this plant. The channel cover and lock ring were each 5 feet in diameter, and weighed

4,000 lb and 2,000 lb, respectively.

The Hydrodesulphurisation unit was being restarted following catalyst exchanging work

when plant personnel noticed that hydrocarbon was being released from the heat

exchanger. Plant personnel were working to complete the additional tightening work

required on the heat exchanger bolts due to thermal expansion when the explosion

occurred at approximately 15:55. The subsequent fire was brought under control in two

hours and 45 minutes by fire fighters using 15 fire trucks.

Fire / Explosion

16 October, 1992

Sodegaura, Japan

$160,000,000 $280,000,000

Refineries


6

An explosion originating in the Hydrogen processing unit occurred at 21:43 in this 75,000

bbl/d refinery. Extensive damage resulted to the Hydrocracker, Hydrodesulphurisation, and

Hydrogen processing units as a result of the explosion and subsequent fires, which were

fueled by hydrocarbon released from the damaged process column and equipment. This

explosion, which damaged nearby buildings and shattered windows several miles away,

was recorded as a ‘sonic boom’ at the California Institute of Technology in Pasadena,

approximately 20 miles from this 350-acre refinery.

The explosion resulted from the rupture of a 6 inch diameter carbon steel 90º elbow

(outside radius) and release of a hydrocarbon - hydrogen mixture to the atmosphere. The

vapour cloud ignited within seconds of the rupture at an undetermined point in the plant.

A review of process data showed that there were no out-of-range or warning indications

relevant to the incident until after the time the elbow had failed. The City of Los Angeles

Department of Water and Power delivers electricity to the refinery and about 12 hours

before the incident the city had a power outage. A review of the information showed that

the power outage and restart were not a contributory cause of the incident. An inspection

after the failure found the line at nearly full design thickness a short distance away from

the failure. On these facts, it was concluded that the line failure was the result of the

thinning of the Schedule 120 carbon steel elbow due to long term erosion/corrosion.

The fire fighting effort was coordinated by the refinery emergency response team, with

the Los Angeles City and Los Angeles County Fire Departments utilising the Joint Incident

Command System. The refinery emergency response team, under the observation of the

Coast Guard, placed booms in the Dominguez Channel storm drain to stop oily water run-

off generated by the fire fighting effort from reaching the Los Angeles Harbour. The fire

was finally extinguished at 02:00 on 11 October.

Because of this incident, the refinery’s gasoline production was reduced to 35,000 bbl/d

(approximately 70 % of rated capacity) until repairs to the damaged process units were

complete. By early May 1993, the repairs to these damaged units were reported to be 95

percent complete, and were finished shortly afterwards.

Fire / Explosion

08 October 1992

Wilmington, California, USA

$78,000,000 $140,000,000

An 8 inch diameter pipeline operating at approximately 700 psi ruptured, releasing a mix

of ethane and propane. The record low temperature of 10 ºF for the region is believed

to have contributed to the rupture. After a few minutes, the resulting vapour cloud was

ignited, causing an unconfined vapour cloud explosion.

The explosion shattered windows up to 6 miles away and could be felt as far as 15 miles

away. Seventeen additional pipelines, in a pipe rack containing 70 lines, were ruptured by

the explosion. The resulting fire involved two large storage tanks holding 3,600,000 gallons

of diesel, twelve small tanks containing a total of 882,000 gallons of lube oil, and two

separator units.

The explosion resulted in the partial loss of electricity, steam, and fire water for the

refinery since two power lines, two steam lines,and a 12 inch diameter fire water line were

located in this pipe rack. Upon the initial explosion, the lines for the dock fire pumps were

damaged. Therefore, the water for fire fighting had to be supplied with the remaining

plant fire pumps and municipal fire trucks taking draught from alternate sources.

Approximately 48,000 gallons of AFFF foam concentrate, 200 fire brigade members,

and 13 pumper units were used during the fire fighting effort, which was successful in

extinguishing the fire approximately 14 hours after the initial explosion.

Because of this incident, the refinery was completely shut down for three days and

operated at reduced capacity for an additional three weeks.


24 December, 1989

Baton Rouge, Louisiana, USA

$69,000,000 $130,000,000

Refineries


7

Hurricane Hugo struck this refinery, causing extensive damage to fourteen of the 500,000

- 600,000 bbl storage tanks in the tank farm area, the administration building, and the

company housing. The damage to process units, which were idled in preparation for

the hurricane, was limited to the asbestos insulation on process columns and piping. A

maximum wind speed of 192 mph was reported for this hurricane before the wind speed

measuring device at the St. Croix airport was damaged.

Because of the damaged asbestos insulation, approximately 1,500 company employees and

contractors worked seven days / week for 15 weeks to remove the asbestos debris from the

refinery at a substantial extra expense. Additionally, an outside contractor specialising in the

construction of atmospheric storage tanks worked for more than one year rebuilding the

14 storage tanks damaged in the tank farm area.

Hurricane

18 September, 1989

St Croix, Virgin Islands, USA

$170,000,000 $310,000,000

A 2 inch diameter line carrying hydrogen gas at 3,000 psi failed at a weld, resulting in a

high pressure hydrogen fire. The fire resulted in flame impingement on the calcium silicate

insulation of the skirt for a 100 feet high reactor in a Hydrocracker unit. The steel skirt for

this reactor, which was between 10 and 12 feet in diameter and had a wall thickness of

7 inches, subsequently failed. The falling reactor damaged air coolers and other process

equipment, greatly increasing the size of the loss.

At the time of the loss, the Hydrocracker unit was being shut down for maintenance and

the reactor was in a hydrogen purge cycle. The initial hydrogen leak is believed to have

resulted from the failure of an elbow to reducer weld in the 2 inch diameter hydrogen

preheat exchanger by-pass line.

Because of this incident, approximately 25 % of the refinery throughput capacity, including

the complete Hydrocracker unit production, was lost for a period of 5 months. Restoration

of the Hydrocracker itself required nearly two years.

Fire

10 April, 1989

Richmond, California , USA

$90,000,000 $170,000,000

Operations were normal in a 90,000 bbl/d FCC unit when internal corrosion caused the

failure of the outside radius of an 8 inch diameter carbon steel elbow located 50 feet above

grade in the Depropaniser column overhead piping system. An estimated 20,000 lb of C3

hydrocarbons escaped through the resulting hole, forming a large vapour cloud during the

30 seconds between failure and ignition. Both the Depropaniser column (operating at 270

psi at 130 ºF) and the Depropaniser Accumulator depressured through the opening.

Ignition of the vapour cloud probably was caused by the FCC Charge heater. The

initial blast destroyed the FCC control building and toppled the 26 feet diameter main

fractionator from its 15 feet high concrete pedestal. The column separated from its 10 feet

high skirt before falling. Analysis of bolt stretching of towers in the blast path indicated

over pressures as high as 10 psi.

The refinery immediately lost all utilities, including fire water and the four diesel fire pumps,

greatly limiting the fire fighting effort for several hours. Steam pressure dropped abruptly

due to severed lines. Twenty major line or vessel failures occurred in the FCC and elsewhere

throughout the 215,000 bbl/d refinery. Blast damage throughout the plant was extensive,

but was most severe in the FCC unit. About 5,200 property claims were received for off-

site damage at distances up to 6 miles. The FCC unit eventually was demolished and a new

unit was constructed.

A preliminary report stated that the failed elbow was located downstream of the injection

point where ammoniated water was added to reduce Depropaniser condensation or

fouling. The elbow was a designated inspection point in the overhead piping system for

taking ultrasonic thickness measurements during turnarounds. These inspections had

constantly shown the expected corrosion rates of 0.05 mils/y. Measurements taken at the

failed elbow and in the downstream piping after the explosion revealed unexpected high

localised corrosion rates.


05 May, 1988

Norco, Louisiana USA

$290,000,000 $560,000,000

Refineries



8

250,000 gals of fuel leaked into subsoil causing ground water contamination. A Clean-up

order was issued by the local water authority.Fire / Explosion

14 April, 1988

USA

$89,000,000 $170,000,000

A straight run of 8 inch diameter line carrying hot oil from the High Pressure separator to

the Low Pressure stripper in a refinery Hydrodesulphuriser fractured circumferentially in the

parent metal in the heat zone about 1.5 inches from a weld. Hot oil at 700 psi and 650 ºF

sprayed across the roadway into the Hydrogen units where ignition occurred.

An intense fire around the pipeway in the Hydrogen plant caused a 16 inch diameter gas

line to rupture, adding a second blow torch to the fire. In successive order, more pipes

ruptured with explosive force in adjacent areas.

The fire caused a crash shutdown of the entire 600,000 bbl/d refinery. After 6.5 hours,

the fire was extinguished. Damage was extensive. The three Hydrogen plants and the four

HDS units were heavily damaged or destroyed. Four years after the plant was built and

nine years before the loss, the line which failed was judged as having excessive vibration.

It is believed that the hot oil line failed due to fatigue, in turn largely due to hydrogen

embrittlement.

Fire

13 December, 1984

Amuay, Venezuela

$62,000,000 $130,000,000

Erosion failure in a 10 inch diameter slurry recycle oil line in an 82,000 bbl/d fluid bed

Coking unit released liquids near their autoignition temperature. Vapours which covered

a large area ignited almost immediately resulting in a large area ground fire which led to

the failure of six or seven more lines. The fire eventually extended over a 150 feet diameter

area with damage up in the unit structure to over 100 feet.

Metallurgical examination revealed that an 1.8 inch long piece of carbon steel pipe had

inadvertently been inserted into the 5-chrome slurry recycle line during an earlier metals

inspection.

The Reactor Fractionator, Light Gasoil stripper, 15,000 hp Air Blower, pumps, pipe racks,

etc., were severely damaged or destroyed.

About 2,700 barrels of hydrocarbon liquids were released from process equipment during

the fire. Much of this was by gravity flow from ruptured lines although pumps, which could

not be shut down, contributed much of the flow. A 900 psig steam line, which supplied

the turbine drivers of the compressors, ruptured hampering fire fighting efforts.

Fire

15 August, 1984


$160,000,000

Refineries


9

Just prior to the rupture of a 55 feet tall, 8.5 feet diameter Monoethanolamine Absorber

column, a refinery operator noted a 6 inch long horizontal crack at a circumferential weld

which was leaking propanes. As the operator attempted to close the inlet valve, the crack

spread to about 24 inches. The area was being evacuated and the plant fire brigade was

arriving when the column failed massively. Propane at 200 psig at 100 ºF propelled most of

the 20 ton vessel 3,500 feet where it struck and toppled a 138,000 V power transmission

tower.

The weld separation occurred along a lower girth weld joint made during a repair to the

column 10 years earlier. The vessel was constructed of 1 inch thick SA 516 Gr 70 steel

plates rolled and welded with full penetration submerged arc joints, but without post-weld

heat treatment.

This explosion resulted in severe fires in the Unsaturated Gas plant, and the FCC and the

Alkylation units. After about 30 minutes, a Boiling Liquid Expanding Vapour Explosion

(BLEVE) occurred in a large process vessel in the Alkylation unit. One piece of this vessel

traveled 500 feet shearing off pipelines before striking a tank in the water treatment unit.

Another fragment landed in a unifining unit over 600 feet away, causing a major fire

where it landed.

The first explosion, believed to be from an unconfined vapour cloud, broke windows up to

6 miles from the plant, caused extensive structural damage to refinery service buildings and

disrupted all electric power at the refinery, rendering a 2,500 USgal/min electric fire pump

inoperable. One explosion sheared off a hydrant barrel, resulting in a reduction of fire

water pressure from the two 2,500 USgal/min diesel engine driven fire pumps, which were

operating. The refinery’s blast resistant control centre, approximately 400 feet northeast of

the absorber, sustained little structural damage.

An estimated 30 paid and volunteer public fire departments, together with equipment

from refineries and chemical plants within a 20 mile radius, responded promptly. Many of

the pumpers took suction from the adjoining canal and from a quarry. The pumpers and a

12,000 USgal/min fireboat eventually provided water at pressures sufficient for fire fighting.

Explosion

23 July, 1984

Romeoville, Illinois USA

$190,000,000 $400,000,000

Nearly simultaneous explosions aboard a 70,000 dwt tanker off loading vacuum distillate

and in an 80,000 bbl Ethanol tank at a refinery occurred during a severe electrical storm.

The Ethanol tank was ignited when a plate section of the exploded tanker flew through the

air and struck the tank, causing it to explode and burn.

The ship, tied up at the refinery dock, had discharged all but 50,000 bbl of its 128,000

bbl cargo when the explosion occurred. Unloading had been suspended minutes earlier

because of a storm in the area. Explosions within the ship’s holds spread 5,000 to 10,000

bbl of burning distillate on the water. This involved several nearby docks and four gasoline

and crude oil barges.

The 120 feet diameter cone roof alcohol tank was about a third full. It burned itself out in

about 14 minutes.

Explosion

1 September, 1979

Deer Park, Texas, USA

$68,000,000 $140,000,000

The cause of this loss which started in the Alkylation unit tank farm is unknown. An

unidentified failure led to the release of light hydrocarbons which spread to an ignition

source. A rather intense fire followed in the tank farm. In less than 5 minutes a 5,000 bbl

sphere failed, causing a tremendous fireball and sending pieces of the sphere throughout

the plant. Within the next 20 minutes, five 1,000 bbl horizontal vessels, four 1,000 bbl

vertical vessels, and one additional 5,000 bbl sphere failed from either missile damage or

BLEVEs. Pieces of the tanks traveled in all directions, falling into a number of operating

units and tank farms, starting more fires. Fragments also hit the Fire Water storage tank

and electric fire pumps, leaving only the two diesel fire pumps operational.

Fire

30 May, 1978

Texas City, Texas, USA

$55,000,000 $180,000,000

Refineries


10

Refineries


11

Petrochemical Plants

There appears to be only a weak trend within this data. This is perhaps as a result of petrochemicals assets being generally younger than their refinery counterparts, having been rebuilt after newer, more cost efficient technologies have been developed and implemented. Plant sizes though, are still believed to be generally increasing, which is perhaps reflected in the continuing loss figures in the more recent time periods. The high figure for the period 1985 – 1989 was dominated by two vapour cloud explosion events in the USA (at Pasadena and Pampa), which account for nearly 65% of the total for this timeframe, showing clearly the impact of true Estimated Maximum Losses, defined within Marsh as:

‘The loss that could be sustained under abnormal conditions with the failure of all protective systems.’

Petrochemical losses in five year periods

0 500 1000 1500 2000 2500 3000

2005 - 2009

2000 - 2004

1995 - 1999

1990 - 1994

1985 - 1989

1980 - 1984

1975 - 1979

US$ millions

11


12

Hurricane Ike passed through the Houston area, with related flooding due to storm surge

as far away as Louisiana. Hurricane Ike had an unusually large storm surge. This plant

suffered extensive flooding and wind damage.

Hurricane

12 September, 2008

Texas, USA

$220,000,000 $220,000,000

The accident occurred at one of the methylcellulose manufacturing facilities located at this

site. At 16:26 an explosion occurred and was followed by a fire, which was extinguished at

23:11 the same day.

Seventeen people who were working at the site were injured in this accident (three critically,

five seriously, and nine with minor injuries). There was one minor injury off site. Static

electricity induced the ignition of methylcellulose powders, resulting in a powder dust

explosion. All methylcellulose operations were suspended for 2 months before sequentially

restarting.

Fire / Explosion

20 March, 2007

Niigata, Japan

$240,000,000 $290,000,000

A shelter-in-place was ordered when a fire broke out following an explosion in the

propylene refrigeration section of an ethylene unit. The fire, which burned for 3 days,

forced the shutdown of the facility for some 6 months but caused no deaths or serious

injuries.

Fire / Explosion

29 April, 2006

Texas, USA

$200,000,000 $250,000,000

A release of hexane created a vapour cloud which ignited on an electric motor causing

and explosion. This resulted in damage to the unit and some 20 injuries. The plant was

eventually replaced.

Explosion

10 December, 2005

Munchsmünster, Germany

$200,000,000 $230,000,000

Five people were killed and 2 seriously injured following an explosion at a plastics plant

producing 200 million bbl/y of speciality grade PVC. The highway was shut and local

residents evacuated. The explosion occurred in a reactor where vinyl chloride and vinyl

acetate were being mixed. Up to 75 % of the plant was destroyed in the explosion. The

explosion was felt 8 km away.

OSHA later imposed fines of USD 361,500 against the company saying that it had found

dozens of safety violations from defective equipment to poor worker training. There were

three wilful violations (failing to maintain fire protection equipment, inadequate inspection

of equipment used to process hazardous materials, and failure to repair equipment involved

with dangerous chemicals) and 45 other serious violations.

Explosion

23 April, 2004

Illiopolis, Illinois, USA

$150,000,000 $180,000,000

A machine at the chemical plant overheated leading to a fire which spread engulfing the

compound. Two people were killed in the incident and 68 others injured. Several hundred

people were evacuated and at least five houses near the plant were destroyed.

Fire / Explosion

20 January, 2004

Gresik, East Java, Indonesia

$100,000,000 $150,000,000

A massive explosion occurred in an ammonium nitrate storage warehouse of a fertilizer

plant just outside the southern French city of Toulouse. The warehouse contained

approximately 300 t of off-specification ammonium nitrate crystals. The explosion had the

strength of a 3.2 magnitude (Richter Scale) earthquake and left most of the plant in ruins

and damage to surrounding areas. Thirty people were killed in the blast and approximately

3,000 people were injured. The cause of the explosion has not been determined.

Explosion

21 September, 2001

Toulouse France

$430,000,000 $610,000,000



13

An explosion and fire occurred in an Olefins unit at this petrochemical plant. The incident

originated at the Cracked Gas compressor in the Olefins unit and was caused by a failed air

assisted check valve on a 5 inch diameter, 500 psi discharge line from the compressor. Upon

closure of the check valve, one of the pins holding the two-piece check valve stem broke

and allowed it to open in the opposite direction. This led to a gas leak, ignition, explosion,

and ensuing fire at the partially enclosed compressor building. The explosion damaged a line

to the quench tower, which fed the fire. The fire was allowed to burn itself out.

About 30 workers were treated for minor injuries. At the time of the loss, it was estimated

that the olefins unit would be down for 10 months.

Fire / Explosion

22 June, 1997

Deer Park, Texas, USA

$140,000,000 $210,000,000

Shortly after 0600 an explosion occurred in the ammonium nitrate process area of this

plant. As a result of the explosion, the seven-story main process building was completely

destroyed and a 30 feet diameter crater was created. Additionally, metal fragments

from the explosion punctured one of the plant’s two 15,000 t Refrigerated Ammonia

storage tanks. The punctured tank released an estimated 5,700 t of ammonia, causing

the evacuation of approximately 2,500 people outside of the plant. Metal fragments also

punctured a Nitric Acid tank, resulting in the release of approximately 100 t of this acid.

The explosion tore metal siding from adjacent buildings, damaged three third-party electric

generating stations, broke windows of buildings 16 miles away in Sioux City, and was felt

over 30 miles away.

As a result of this incident, a Business Interruption loss estimated at USD 60,000,000

(money of the day) was incurred.

Explosion

13 December 1994

Port Neal, Iowa, USA

$200,000,000 $240,000,000

The Texas floods along the San Jacinto river shutdown the site, involving 650,000 t/y

ethylene; 200,000 t/y LLDPE; 280,000 t/y LDPE plants, and general utilities. The loss of

utilities affected further downstream clients. Flood water breached dikes around the main

substation and inundated control rooms and offices.

The original loss figure of USD 130 million is combination of Property Damage and Business

Interruption, with the breakdown between these not known.

Mechanical Damage

20 October, 1994

Cedar Bayou, Texas, USA

$130,000,000 $220,000,000

At approximately 0630 an abnormal chemical reaction occurred during the batch production

of a thermoplastic rubber product, resulting in an explosion at this plant. Because of the

explosion, the reactor, process controls, appurtenances, control room, and building for this

production unit were completely destroyed.

The fire then spread to involve part of the tank farm, resulting in the destruction of 5

atmospheric storage tanks. At approximately 123 the first of four 1,000,000 USgal and one

500,000 USgal Styrene storage tanks exploded. A fire fighting attack utilising cooling water

and foam hose streams was used to prevent the fire from involving other nearby storage

tanks, two of which contained butadiene. The fire was extinguished at approximately 1530.

Explosion

27 May, 1994

Belpre, Ohio, USA

$180,000,000 $300,000,000

The failure of a welded joint between a Carbon Dioxide stripper and the main cylindrical

body resulted in the release of gas under high pressure, which consisted of ammonia,

carbon dioxide, and carbamate liquids. Subsequent to the release, an explosion resulted

which caused significant damage to this fertiliser plant. The source of ignition for this

explosion is unknown. This plant, which was constructed in 1970 and upgraded in 1988,

had an annual production capacity of 340,000 t.

Explosion

20 June, 1991

Dhaka, Bangladesh

$71,000,000 $130,000,000

Workers were preparing to check a compressor in the Nitroparaffin unit when they noticed

a small fire and sounded the plant fire alarm. Approximately 30 s later, an explosion

occurred which was followed by a series of smaller explosions. The effects of the initial

explosion were reported as far away as 8 miles from this plant. Additionally, the initial

explosion completely damaged an area of the plant approximately the size of a city block.

Subsequent fires were reported to have burned for more than 7 hours.

Although the incident did not damage the two Ammonia units on site, the entire plant was

temporarily shut down for precautionary measures.

Fire / Explosion

01 May, 1991

Sterlington, Louisiana, USA

$120,000,000 $220,000,000



14

At 0118 an explosion occurred in the Ethylene Oxide process unit at this plant. As a result of

the explosion, the Ethylene Oxide Refining column was completely destroyed, the Ethylene

Glycol unit was substantially damaged, and the Co-generation unit was partially damaged.

A pipe rack near the storage area for liquid ethylene oxide was damaged when a large piece

of shrapnel from the explosion hit the rack, rupturing lines which contained methane and

other hydrocarbon products. The subsequent fire that resulted from the release products

was the only significant fire to occur during this incident.

As a result of the explosion, all utilities at the plant were lost for approximately one week.

Additionally, a significant number of the water spray systems were damaged by the

explosion or in advertently actuated due to a loss of plant air. These systems were shut

off and placed back in service as appropriate. A manual fire fighting effort was used to

extinguish the fire involving the pipe rack once the lines in the rack were isolated.

As a result of this incident, a Business Interruption loss of approximately USD 90,000,000

(money of the day) resulted mainly from the almost full year reduction in ethylene oxide

production. The polyethylene production was restarted in early April 1991, utilising imported

ethylene, while the olefins production was restarted in late April 1991.

Explosion

12 March 1991

Seadrift, Texas, USA

$90,000,000 $160,000,000

At approximately 0830 a gas leak involving the pipe rack that runs from Cangrejera to the

terminal in this petrochemical complex lead to an explosion. This explosion, which occurred

near the complex chemical plant, caused additional damage to the pipe rack resulting

in a major gas leak: A powerful second explosion occurred that reportedly could be felt

more than 15 miles from the complex. This explosion and the subsequent fire completely

destroyed the chemical plant, caused significant damage to the pipe rack, and resulted in

moderate damage to other complex buildings and adjacent third-party facilities. The fire was

extinguished in approximately 3 hours.

Because of this incident, the chemical plant at this complex was completely shut down for 7

months, being the time required to rebuild the plant and the pipe rack. During this period,

the vinyl chloride production at this complex was lost, disrupting most of Mexico’s total

annual output of 200,000 t.

Fire / Explosion

11 March, 1991

Pajaritos, Coatzacoalcos,

Mexico

$97,000,000 $170,000,000

Shortly after 1300 a large flow of ethylene, the reactant, and isobutane, a catalyst carrier,

was released from one of the High Density Polyethylene (HDPE) units at this chemical

complex. The vapour cloud drifted northward toward the center of the HDPE process area

before ignition, which is believed to have occurred approximately 60 s after the release.

Seismograph data from recording stations in the area suggested the blast was equivalent to

the detonation of 10 tons of TNT.

The explosion destroyed two HDPE units, which included a total of eight particle form, loop

reactor trains. The heat from the explosion caused BLEVEs of nearby pressurised storage

tanks. Other process units at this chemical complex sustained only minor damage and

resumed normal production within a few weeks of the incident.

The initial release of ethylene and isobutane occurred through an 8 inch diameter ball valve

on the No. 4 settling leg of a reactor in Plant V. The major function of this pneumatic

valve is to isolate the settling leg and other downstream equipment from the reactor for

maintenance. The company maintenance procedures for opening a settling leg included

closing the ball valve, inserting a lock-out device into this closed valve, closing the block

valves to the air hoses for the valve operator, and disconnecting these air hoses. Company

personnel confirmed that these maintenance procedures were performed on Saturday,

October 21. Due to changes in maintenance priorities, the work on settling leg No. 4 was

not started until Monday, October 23.

After the explosion, investigations indicated that the lock-out device had been removed

from the valve and the air hoses had been reconnected to the valve operator on settling

leg No. 4. The valve was found in the open position and the settling leg was open to

atmosphere at the bottom of the leg where a swedge spool leading to the product take-off

valve should have been connected.

A Business Interruption loss in excess of USD 700,000,000 (money of the day) resulted

from this incident since a period of approximately 24 months was required to restore the

full HDPE production capacity at this chemical complex. This incident represents the largest

single-owner Property Damage loss to occur in the petrochemical industry.


23 October, 1989

Pasadena, Texas, USA

$680,000,000 $1,300,000,000



15

A hairline crack in a welded seam of piping to the level indicator system on the Aldehyde

column resulted in a minor ethylene oxide leak. As a result of this crack, which was

caused by low cycle fatigue, ethylene oxide escaped near the level indicator and formed

polyethylene glycols (PEG) in the mineral wool insulation. It is believed that both the

leak and accumulation of PEG occurred over a period of time. During repairs to the

level indicator, the metal sheathing of the insulation was removed and air contacted the

insulation soaked with PEG. Auto-oxidation of the PEG resulted and the insulating material

was ignited. The piping for the level indicator system was heated to such a degree that auto

decomposition of the ethylene oxide within the piping occurred. This auto-decomposition

then propagated into the Aldehyde column which subsequently exploded.

The force of the explosion completely destroyed the distillation section of this plant. The

large resulting fire and impact of flying debris to other process sections resulted in extensive

damage throughout the plant. Because of this incident, this plant was closed for at least

24 months and resulted in an additional Business Interruption loss of approximately USD

270,000,000 (money of the day).

Explosion

07 March, 1989

Antwerp, Belgium

$79,000,000 $150,000,000

A runaway reaction triggered an explosion and fire which destroyed the plant and a

neighbouring building. The wrong components were added to chemical mixture.Fire / Explosion

14 February 1989

Germany

$80,000,000 $150,000,000

An explosion at a plant that manufactured ammonium perchlorate (AP) for rocket fuel

flattened the local industrial park, left a crater 125 m across, and cracked walls 15 miles

away. Two people were killed. The cause thought to be a fire in a batch dryer. The intial

explosion was at 11.53 and was equivalent to 108 t of TNT, with a second explosion at

11.57 equivalent to 235 t of TNT. Approximately 50% of the buildings in the nearby town

of Henderson, Nevada, were destroyed at cost of USD 70 million (money of the day). A

natural gas pipeline that ran under the plant was ruptured in the event and burned for one

week.

Explosion

04 May, 1988

Henderson, Nevada, USA

$300,000,000 $580,000,000

At 1550 on Saturday afternoon, an explosion occurred in an air line in a reactor used for

the liquid phase oxidation of butane as it was being started up. The explosion ruptured

the external portion of the air line to the reactor, allowing the reactor contents to rapidly

vapourise and form a vapour cloud. A vapour cloud explosion occurred about 25 to 30 s

after the first explosion. There was extensive Property Damage in the immediate area and

significant damage throughout the site. Windows were broken 7 miles away. The root

cause was believed to be insufficient purging of the reactor when it was shut down.


14 November, 1987

Pampa, Texas, USA

$220,000,000 $430,000,000

An explosion occurred in the final purification column of this plant, resulting in 14 people

being injured. The explosion inititated several secondary fires on the orginal units as well as

others nearby, but all were under control within 30 minutes. The root cause was confirmed

to be a rapid overpressurisation of the column due to decomposition of material within it,

although the original ingnition source has never been confirmed.

Explosion

03 July 1987

Zwijndrecht, Antwerp, Belgium

$78,000,000 $160,000,000



16

Operations within this 600,000 t/y Ethylene plant were normal until a faulty temperature

probe initiated an isolation of the hydrogenation equipment located within the cold section.

While the operators were attempting to regain normal control, the pressure relief system

came into operation. About the same time, fire was noted near grade level at the base of

the Deethaniser column. The source of fuel is believed to be a flange at the Deethaniser

column reboiler or in the relief system pipe work.

Leaking hydrocarbon, mostly propylene at 375 psig, was possibly ignited by hot steam

piping. The intense fire rapidly engulfed the adjoining Ethylene and Propylene distillation

columns and spread 180 feet to the storage area. Eventually one vertical pressurised

propane storage tank exploded, its top section travelling 1,500 feet and missing a gas

holder by 30 feet. Two other propylene tanks toppled; one onto a pipe rack and the

other against an ethylene tank. All were protected by deluge waterspray systems which

apparently were ineffective under the intense fire exposure. Five of the 8 ethylene and

propylene tanks collapsed or exploded. The fire also spread to the API separator and to

three floating roof tanks. Pipe racks, motor control centers, pumps, etc., were severely

damaged or destroyed.

Within a few minutes after the fire brigade responded, the Ethylene column released its

9,300 USgal inventory, destroying one of the plant’s two foam trucks. Assisted by outside

fire fighting agencies, the plant fire brigade brought the fire under control in 40 hours and

finally extinguished it 4 days after ignition.

Fire

19 May, 1985

Priolo, Italy

$74,000,000 $150,000,000

This fire started in the oxidation plant. Some 130 firemen using 25 appliances controlled

the blaze after 4 hours. The local rail line,ship canal, and roads were closed and 200 people

evacuated. The plant was rebuilt differently with larger spacing to obtain the authorities

approval.

Fire

15 September, 1984

Cheshire, UK

$62,000,000 $130,000,000

Improper maintenance procedures during cleaning of a plugged recycle cooling line on

a 10,000 USgal Polypropylene reactor released hydrocarbons and polymer. Instead of

removing only the motor operator of a 4 inch diameter plug valve, the valve itself was

accidentally removed. The release of between 12,000 to 16,000 lb of monomer at 150 psi,

produced a vapour cloud which ignited after about two minutes.

The explosion broke flammable liquid lines throughout the 3 process trains and opened

polymer lines in the finishing area. The blast also broke fire protection system risers,

disrupting all firewater. Fires throughout the polymerisation finishing and storage silo areas

burned for over 10 hours. Two of the three process lines, the control building, and the

finishing area were severely damaged. The compressor building, solvent recovery area,

finished product warehouse, and cooling tower were moderately damaged.

The fire fighting effort was accomplished with the use of 21 industrial fire brigades, and

volunteer and paid fire departments.


Newcastle, Delaware , USA

$45,000,000 $120,000,000

A vent connection failed on compressor suction line, releasing gas which led to a violent

explosion with widespread damage. This was believed to be a fatigue failure due to

vibration.

Fire / Explosion

02 October, 1975

Antwerp, Belgium

$60,000,000 $230,000,000

This is generally accepted to be a pipeline bellows failure due to design error and lack

of modification control. The failed bellows (500 mm in diameter) released some 30 t of

cyclohexane which formed a vapour cloud and exploded, destroying the plant, killing 28

people on site, injuring 53, and inflicting damage to some 1,821 houses and 167 business

premises. The number of fatalities would have been higher had it not been a weekend.

The ensuing fire burnt for 3 days.


01 June, 1974

Flixborough, UK

$58,000,000 $250,000,000


17

Gas Processing Plants

This sector of the industry does not present a particularly obvious trend either, with a small number of losses with large loss quantums characterising this section. There are also several periods where this sector of our industry does not have any events that make it into the ‘100 Largest Losses’.

New plants and systems are being built to handle gas or liquefied natural gas (LNG) although again these recently built facilities often present good risk management and mitigation features such as good layout, good separation, and good levels of process isolation and gas detection.

Gas processing losses in five year periods

0 300 600 900 1200 1500

2005 - 2009

2000 - 2004

1995 - 1999

1990 - 1994

1985 - 1989

1980 - 1984

1975 - 1979

US$ millions




18

Twenty seven people were killed, seventy two injured and seven reported missing following

an explosion at this LNG plant. The explosion destroyed three out of six liquefaction trains,

damaged a nearby power plant and led to the shutdown of a 335,000 bbl/d refinery. There

was also some damage to the neighbouring industrial facilities. A faulty boiler was initially

blamed for the incident. Investigations, however, indicate a large release of hydrocarbon

which ignited upon ingestion into the boiler. Train 6 of the LNG Complex re-started in May

2004 and Trains 5 and 10 in September 2004. Trains 20, 30 & 40 were destroyed in the

incident representing 50% of the capacity of the LNG complex.

Fire / Explosion

19 January, 2004

Skikda, Algeria

$470,000,000 $580,000,000

Alleged workmanship defects on small bore piping. Design / Workmanship

13 July, 2003

Karachaganak, Kazakhstan

$100,000,000 $150,000,000

Gas supplies to Australia’s Victoria State were virtually shut down following an explosion

and fire at this gas processing plant. The specific cause of the accident was attributed

to the rupture of a heat exchanger following a process upset that was set in motion by

the unintended, sudden shutdown of hot oil pumps. The loss of hot oil supply allowed

some vessels to be chilled by cold oil, and when the hot oil was re-introduced to the heat

exchanger, the vessel ruptured due to a brittle fracture. An initial release of approximately

22,000 lb of hydrocarbon vapour exploded, and an estimated 26,000 lb burned as a jet

fire. The fire burned for 2.5 days. Operator error and improper training of employees was

sited in the report issued by the Longford Royal Commission formed to study the incident.

Explosion

25 September, 1998

Longford, Victoria, Australia

$440,000,000 $680,000,000

At 2230 on December 25, an explosion and fire occurred at a gas-to-liquids (GTL) plant in

Bintulu, Sarawak. The fire was brought under control on December 26.

The plant was one of only two commercially successful GTL plants in the world with

a capacity to produce 12,500 bbl/d of middle distillates and waxes from natural gas

feedstocks. The explosion occurred in the Air Separation unit (ASU) which supplies oxygen

for the production of synthesis gas feedstock. The investigation into the incident pointed

to an incipient combustion event in the ASU as the most probable cause. This combustion

event is thought to have initiated explosive burning of the aluminum heat exchanger

elements in the presence of liquid oxygen, such that the elements ruptured explosively.

Some 12 people were injured, none seriously, and the plant was shut down for several

months for repairs.

Fire / Explosion

25 December, 1997

Bintulu, Sarawak, Malaysia

$275,000,000 $430,000,000


19

A vapour cloud explosion centered in the cryogenic unit No. 2 and two subsequent

explosions in the cryogenic unit No. 1 occurred at this gas processing complex. As a result

of the explosions, the cryogenic unit No. 2 and LPG product pumps in the Cryogenic unit

No. 1 were extensively damaged, the control rooms for both units were destroyed, and the

remainder of the Cryogenic unit No. 1 experienced minor damage.

On July 25, plant personnel noticed that one of the two LPG product pumps in the

Cryogenic unit No. 1 had a seal leak. Consequently, plant personnel decided to have

the faulty seal replaced on July 26. In preparation for the maintenance work on the LPG

product pump, the motor operated valve (MOV) in the suction line and the isolation

valve in the discharge line of this pump were manually closed. A spectacle blind was then

inserted into the pump flange on the suction side of the pump. After the seal was replaced,

plant personnel removed the blind and were in the process of tightening the flange bolts

when LPG product began to leak from this flange. A vapour cloud formed and drifted into

the cryogenic unit No. 2. It was ignited, and resulted in the initial explosion. Following the

explosions, it was determined that the MOV in the suction line of the pump was in the

open position, which allowed the LPG product to reach the pump flange.

The fire brigades successfully extinguished the fire following the explosions in approximately

three hours, and protected the adjacent LPG spheres. If these spheres had failed due to

BLEVE (Boiling Liquid Expanding Vapour Explosion) the property plant damage would have

been substantially greater. Although the explosions damaged the electric power in the

plant and rendered the electric motor driven fire water pumps non-operational, fire water

was provided by two diesel engine driven fire water pumps.

Because of this incident, the 2.13 billion ft3/y gas processing capacity at this complex was

shut down, disrupting one third of Mexico’s total gas processing capacity. An estimated

18 months was required to repair or replace the damaged cryogenic units, including the

associated control rooms.


26 July, 1996

Cactus, Reforma, Mexico

$140,000,000 $220,000,000

A series of electric power interruptions caused several shutdowns of one or both of the

identical 165,000 bbl/d gas fractionation process trains. The parallel trains were separated

from one another by about 100 feet. At the time of the loss, propane feed to Plant I was

about 100 % of design capacity and about 25 % of capacity of Plant II.

It is believed that there was a release of about 1,900 bbl of propane in Plant I over a 30

minute period. Ignition of the large vapour cloud is believed to have been by a security

vehicle which had stalled and was being restarted. The probable source of propane was a

flange in a 4 inch diameter relief valve line.


15 August, 1987

Juaymah, Saudi Arabia

$65,000,000 $130,000,000

A 22 inch diameter gas transmission pipeline operating at 500 psig developed a leak due

to corrosion. The leak expanded and the line parted, releasing a vapour cloud near a

gas processing plant area that covered a significant area. After about 7 minutes ignition

occurred from a flare located 1,500 feet downwind. The jet/whipping action of escaping

gas threw a 22 feet long section of pipe 400 feet where it struck the vapour space of one

of two 10,000 bbl pressurised spheroid tanks. A second vapour cloud formed and was

ignited, developing detonation over pressures of 7.8 psi.


15/04/197

Abqaiq, Saudi Arabia

$54,000,000 $120,000,000

A 30 inch diameter crude oil pipeline failed and destroyed 3 pressurised spheroids,

pumping units and other equipment. Ignition was caused by motor vehicles.Material Failure

11 May, 1977

Abqaiq, Saudi Arabia

$55,000,000 $190,000,000

A 260,000 bbl tank containing about 236,000 bbl of refrigerated propane at 45 ºF failed

catastrophically and the wave of liquid propane swept over the dikes and inundated the

51,000 bbl/d process area before igniting. An adjoining tank containing 125,000 bbl of

refrigerated butane also was destroyed, as was most of the process area. The fire burned

out of control for 2 days and was extinguished after 8 days. Weld failure was attributed to

three possibilities including micro-biological sulphate reducing bacteria from hydrotesting

the tank with sea water.

Reportedly, the tank weld that failed had been repaired following a weld failure incident

one year earlier in which 14,000 bbl of propane were released and a massive vapour cloud

traveled 500 feet but did not ignite.

Fire

03 April, 1977

Umm Said , Qatar

$76,000,000 $180,000,000



20

Terminals/Distribution

The magnitude of losses at terminals and other points of distribution appears truly flat, but this sector now represents relatively few incidents in the 100 largest property loss ranking, largely due to the size of other events elsewhere in other sectors. Only six incidents have been used to generate this chart.

Of course, whilst some losses are dramatic and of great interest to the press and the general public, this level of interest is not always reflected in the financial loss incurred. Incidents of interest to the general public are often those with large plumes of smoke, inconvenience to the public, and ‘knock on’ damage, as well as, sadly, high levels of death and injury. The Buncefield tank farm fire in the UK was a good example of this, with the fire closing the local motorway and causing damage to a number of third party assets whilst not making this ‘100 Largest Losses’ document as the Property Damage figure was relatively low, particularly when compared to the third party and Business Interruption claims.

Terminals and Distribution losses in five year periods

0 100 200 300 400 500 600

2005 - 2009

2000 - 2004

1995 - 1999

1990 - 1994

1985 - 1989

1980 - 1984

1975 - 1979

US$ millions

20


A petrol tanker caught fire and exploded as fuel was being offloaded into another tanker.

One driver was alleged to have been smoking when the incident occurred.

The fire destroyed property worth over USD 160 million. A prefabricated concrete wall

surrounding the premises was also destroyed and electricity cables were burnt down

resulting in a blackout in some parts of the area.

Fire / Explosion

08 July, 2003

Harare, Zimbabwe

$160,000,000 $290,000,000

Four people were killed in an explosion and fire at an oil gathering centre, gas booster

station and power substation. The explosion occurred after a leak from an oil pipeline

spread to a power substation, sparking the blaze. The blaze hit a gathering centre and

gas booster, rupturing a gas pipeline. Nineteen people were also injured in the incident

suffering mainly first and second degree burns. The fire was extinguished two days after

the event.

Kuwait’s production dropped by 600,000 bbl/d after the accident, with the oil gathering

centre formally reopened on 25 January 2005.

Fire / Explosion

31 January, 2002

Raudhatain, Kuwait

$150,000,000 $210,000,000

25 miles of Trans Andean pipeline disappeared in this event, which also damaged natural

gas and gasoline pipelines. All 285 producing wells were shut down and oil exports were

suspended and swap arrangement made with Venezuelan suppliers. The first earthquake

registered 6.0 on the Richter scale, the second 6.8, and there were a total of ten

earthquakes in total. Repairs took several months.

Earthquake

05 March, 1987

Ecuador

$120,000,000 $240,000,000

An eleven-year-old 121,000 dwt tanker had completed unloading its first parcel of

Arabian heavy crude at a deep-water port. No transfer operations between the ship and

the jetty were in process when a small fire was noticed on deck. About 10 minutes later

fire spread along the length of the ship and was observed on the sea at both sides of

the ship. After 30 minutes, a massive explosion occurred. It is theorised that the initiating

event of the disaster was the buckling of the ship’s structure at or about deck level. This

was immediately followed by explosions in the ballast tanks and the breaking of the ship’s

back. These events were produced by the conjunction of two separate factors: a seriously

weakened hull due to inadequate maintenance, and an excessive stress due to incorrect

ballasting at the time of the disaster.

A fragment of the ship weighing 1,000 lb was found at the base of a large crude oil tank,

a distance of 1,800 feet from the ship. In addition to total loss of the ship, 50 people lost

their lives and 1,130 feet of the concrete and steel jetty were damaged or destroyed.

Explosion

08 January, 1979

Bantry Bay, Ireland

$70,000,000 $210,000,000

A pipeline pump started whilst the strainer coverplate was being removed, and the oil

released ignited. The fire was mostly confined to the pump house.Fire

08 July, 1977

Fairbanks, Alaska, USA

$40,000,000 $140,000,000

The United States flag tanker ‘Edgar M. Queeny’ rammed the Greek tanker ‘Corinthos’

while the latter was discharging 400,000 bbl of crude oil at a refinery jetty at Marcus Hook

on the Delaware River. A massive initial explosion and subsequent explosions and fires

occurred on the Greek ship as a result of the collision. Some 25 crew members were killed

on board this vessel, in addition to one crewman from the flag tanker. The Corinthos sank

shortly afterwards and was later removed for scrapping.

Fire / Explosion

31 January, 1975

Marcus Hook, USA

$50,000,000 $200,000,000

21

Terminals/Distribution


Upstream

22

The upstream loss data shows the, sadly, normal increasing trend in the magnitude of losses over the seven five year periods analysed, with the peak in the middle of the chart being due to the Piper Alpha incident when some 167 crew members lost their lives. This also represents the largest single Property Damage event (at current values) in this edition.

It should be remembered that the incidents identified in this document are generally loss events to a single facility, and as such therefore this analysis does not identify some of the larger aggregated losses from recent hurricane seasons in the Gulf of Mexico, which have each led to damage to multiple upstream assets (as well as some on-shore ones). The losses from hurricanes Katrina, Rita and Ike are still being finalised and therefore not included in this edition, but the cumulative effect of these single ‘incidents’ would rank these very highly in this list. In addition, examination of the complete loss data that we maintain shows that there has recently been a higher number of smaller magnitude losses that are not included in this graph, and this should be a cause for concern.

As with other sectors of the hydrocarbon and chemicals industry facilities are generally getting larger, and are being constructed to operate in deeper waters and harsher environmental conditions. Losses, when they do occur, are therefore larger, but it appears that the industry has learned from some of the serious incidents in the past, such as Piper Alpha, and newer facilities are better designed to prevent, detect, and mitigate the effect of releases. Drilling techniques also appear to be improving, with fewer losses from this activity.

Upstream losses in five year periods

0 1000 2000 3000 4000 5000

2005 - 2009

2000 - 2004

1995 - 1999

1990 - 1994

1985 - 1989

1980 - 1984

1975 - 1979

US$ millions

22


23

Upstream

This incident involved a blowout and required an extended redrill Fire / Explosion

2009

Angola

$140,000,000 $140,000,000

The details of this incident are still being established. The reported loss figures are for

the damage to the platform and the rig and for the removal of the wreck. Additional

significant costs have been incurred for the well control.

Blowout

21 August, 2009

Timor Sea,

Australia

$350,000,000 $350,000,000

A well-intervention vessel lost power and collided with an unmanned platform forming part

of this 230,000 bbl/d complex. Heavy damage was caused to the vessel and the platform,

inlcuding damage to the platform structure, linking access bridge, and well equipment

. Some 23,000 bbl/d of oil production was reportedly affected. The force of the collision

caused the bow of the vessel to compress by about 2 m, with the platform pushed partly

out of position, loosening several support legs from the main load-bearing structure. One

of the water injection risers on the platform was bent “extensively” and several wellheads

were moved, with a catalogue of further damage from the collision also identified.

Collision

04 June, 2009

Ekofisk, North Sea

$750,000,000 $750,000,000

No further details known Unknown

02 October, 2007

Indonesia

$120,000,000 $140,000,000

No further details known Unknown

05 November, 2006

North Sea, Norway

$230,000,000 $280,000,000

No further details known Faulty Design / Workmanship

20 April, 2006

South China Sea, China

$120,000,000 $150,000,000

Hurricane Dennis passed through the area where the platform was located, causing it

to partially sink and resulting in damage. There is some discussion of a possible design

problem but this has not been confirmed.

Hurricane

10 July, 2005

Gulf of Mexico, USA

$250,000,000 $290,000,000

A jack-up drilling rig was drilling a natural gas well when a gas blowout occurred during

drilling operations. There was an explosion followed by fire which was initially contained

on the jack-up. For reasons unknown, the fire then spread to the platform where it

continued to rage for over a week before being brought under control. More than 150

workers on the jack-up and platform were evacuated with no casualties. The drilling

rig sank and was not salvageable. The platform, was damaged beyond repair and its

destruction was ordered by Egypt’s petroleum minister. Less than a year after the accident,

production at the Temsah field was back on-stream at full production rates.

Blowout

10 July, 2004

Mediterranean, Egypt

$190,000,000 $230,000,000


Upstream

24

No further details known Riot

15 April, 2003

Escravos, Nigeria

$550,000,000 $650,000,000

This incident occurred at an oil sands facility, with minor explosions occurring in the

Froth Treatment plant. Damage was limited to electrical cables in the Solvent Recovery

area. The cause of the fire appears to have been a hydrocarbon leak from piping. The

plant’s emergency response team was assisted by the local fire brigade and the fire was

extinguished in two hours. Only one minor injury was reported. The incident occurred 8

days after the new facility began operating.

Fire / Explosion

06 January, 2003


$120,000,000 $160,000,000

No further details known Piling Operations

25 August, 2002

North Sea, Norway

$96,000,000 $150,000,000

The world’s largest offshore production facility was rocked by a series of explosions caused

by a gas release. The explosions knocked out a support pillar of the semi-submersible

platform allowing seawater to enter the vessel. Workers pumped in nitrogen and

compressed air and tried to pump out almost 3,000 t of seawater to keep the rig afloat, but

were unsuccessful. On March 20, the rig sank to the sea floor. The incident killed a total

of 11 workers. Lost production was estimated as having a value of USD 450,000,000 in

money-of-the-day.

Explosion / Fire / Sinking

15 May, 2001

Campos Basin, Brasil

$500,000,000 $710,000,000

No further details known Faulty Design / Workmanship

31 December, 2000

North Sea Norway

$130,000,000 $190,000,000

A rig deck fabricated in Korea was in transit to Angola when it hit an underwater reef off

the coast of Sumatra. The transport vessel capsized within 4 minutes in a water depth of

32 m, resulting in 5 fatalities. The cause of the sinking has been attributed to the ship not

following the recommended route.

Mechanical Damage

02 Novemeber, 1999

Indonesia

$210,000,000 $320,000,000

One of two topside modules was dropped while being lifted for installation. The module

struck a transport barge and the installation barge causing an explosion. The module sank

to the sea floor.

Explosion

03 December, 1998

Gulf of Mexico, USA

$110,000,000 $170,000,000

An apparent failure of a Propane Intercooler liquid level control during unsupervised

maintenance led to an explosion and fire. The control room on the main platform was

destroyed and adjacent platforms were affected by the blast wave. Eleven fatalities resulted

from the incident.

Explosion

25 March, 1993

Lama, Lake Maracaibo, Venezuela

$100,000,000 $170,000,000

There was damage to substructure primary piles with associated insert pile installation

difficulties. Specilaist jacking tools were manufactured to open out primary piles. The

damage estimate is understood to be the initial reserve placed on the loss.

Mechanical Damage

01 November, 1992

North West Shelf, Australia

$270,000,000 $470,000,000


25

Upstream

A contractor was undertaking final submersion tests on a large gravity base structure that

would support the main deck of the platform. The gravity base was approximately 110

m tall, and approximately 600,000 t of concrete were required to construct it. During the

tests, contract personnel reported hearing a loud noise in one of the Drilling shafts. The

base began to take on water and in a matter of minutes had sunk in 200 m of water. The

cause of the cracking of the concrete was believed to be a design error. Other concrete

base structures in the North Sea were surveyed for the same possible design problem as a

result of this incident.

Structural Failure

23 August 1991

Sleipner, North Sea, Norway

$400,000,000 $720,000,000

Contract personnel were installing a pig trap on an 18 inch diameter sales gas pipeline on

the platform. As a cold cut was made into the pipeline, hydrocarbons sprayed from the

cut and ignited. The explosion and fire burned the main structure and caused subsequent

explosions when 6 other pipelines ruptured due to the intense heat. The accident resulted

in the total destruction of the platform and seven fatalities. Two years were required to

replace the platform.

Fire / Explosion

19 March, 1989

Baker, Gulf of Mexico, USA

$400,000,000 $750,000,000

A semi-submersible rig had a gas kick at 15,527 feet during attempt to clear the drill pipe

of cement previously pumped into control the well, and the well then suffered a blow-out.

The well was stabilised after 11 months by pumping heavy mud down a relief well, and it

was later sealed.

Blowout

20 January, 1989

Treasure Saga, North Sea, Norway

$220,000,000 $410,000,000

A self elevating platform capsized 500 miles of Nova Scotia whilst under tow from Halifax

to Great Yarmouth. Gale force winds and 40 feet high waves hindered rescue of the crew

from their survival capsule. The rig sank in 17,000 feet of water, with a possible cause being

a cracked ballast tank during the Force 10-12 wind.

Equipment Failure / Bad Weather

17 December, 1988

Rowan Gorilla 1, North Atlantic,

Canada

$90,000,000 $170,000,000

A release and ignition of gas condensate from a section of piping in the Gas Compression

module of this platform set off a chain of fires and explosions, resulting in the almost

total destruction of the facility. The condensate was released from the site of a pressure

relief valve which had been removed for maintenance, when this section of piping

was inadvertently pressurised. The severity of the accident was due in large part to the

contribution of oil and gas from ruptured pipelines connected to the platform, and

the disabling of nearly all emergency systems as a result of the initial explosion. The

compression module had been retrofitted to the platform adjacent to the control room, and

the control room was rendered useless by the initial explosion.

In addition, the firewater pumps had been placed in the manual operation mode due to

divers being in the water prior to the accident.

There were 226 people on the platform at the time of the accident; only 61 survived.

Contributing to the loss of life was the location of the quarters directly over the site of the

initial release and resulting explosion and fire.

Fire / Explosion

07 July 1988

Piper Alpha, North Sea, UK

$850,000,000 $1,600,000,000

During the conversion of one of the platform wells from oil to gas production, a high-

pressure gas pocket was encountered that forced the drill pipe out of the well. The BOP

failed to shut in the well, and sparks, caused by the drill pipe that was ejected from the

well hitting one of the platform legs, ignited the escaping gas. The fire lasted for 31 days.

Most of the topside structure was destroyed and the facility was later declared a total loss.

Redesign of the production module was completed in 45 days in an effort to shorten as

much as possible the loss of production. Full production was restored 18 months after the

loss.

Fire

24 April, 1988

Enchova, Campos Basin, Brasil

$330,000,000 $640,000,000


26

While cementing casing for a well, a shallow gas pocket was encountered. This caused a

blowout and fire that significantly damaged the platform. The fire destroyed the helideck

and damaged the accommodations module, drilling rig, and a crane boom. The incident

delayed the start of production for several months. The platform damage was later repaired,

and development drilling and enhanced oil recovery was resumed.

Blowout / Fire

20 December, 1987

Cook Inlet, Alaska, USA

$130,000,000 $170,000,000

Sustained casing head pressure leaked from the production casing into the outer casing

strings, resulting in the failure of one of the casing strings. This caused an underground

blowout that resulted in extensive damage to the platform and a gas plume around the

platform. The well was killed to stabilise conditions on the seabed.

Blowout

04 November, 1987

Gulf of Mexico, USA

$200,000,000 $270,000,000

A semi-submersible barge ran aground near Uslan during typhoon. Grounding / Bad Weather

26 August 1986

Sea of Japan, Japan

$75,000,000 $150,000,000

Platform was struck by the ‘Stad Sea’. Collision

01 August, 1975

North Sea, UK

$55,000,000 $210,000,000

The Fateh field L-3 development well had reached 4,180 ft when a ‘kick’ occurred. The kick

control effort was terminated and the rig abandoned when gas broke around the 20 inch

shoe and bubbled up under the platform. Eight days after the blowout, the gas ignited and

in 2 weeks the rig and platform disappeared beneath the Arabian Gulf.

Blowout

01 July 1975

Fateh L3, Dubai, UAE

$79,000,000 $310,000,000

Upstream

The 100 Largest Losses Marsh’s Global Energy Practice

27


Notes

Marsh, the world’s leading insurance broker and risk advisor, has 24,000 employees and provides advice and transactional capabilities to clients in over 100 countries. Marsh is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with more than 55,000 employees and annual revenue exceeding $11 billion. MMC also is the parent company of Guy Carpenter, the risk and reinsurance specialist; Mercer, the pro-vider of HR and related financial advice and services; Oliver Wyman, the management consultancy; and Kroll, the risk consulting firm. marsh.com / marsh.co.ukThe information contained herein is based on sources we believe reliable and should be understood to be general risk management and insurance information only. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such.In the United Kingdom, Marsh Ltd. is authorised and regulated by the Financial Services Authority for insurance mediation activities only.

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