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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
1
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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
The 100 Largest Losses Marsh Energy Practice
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
The 100 Largest Losses Marsh Energy Practice
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
The 100 Largest Losses Marsh Energy Practice
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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
The 100 Largest Losses Marsh Energy Practice
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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
The 100 Largest Losses Marsh Energy Practice
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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
The 100 Largest Losses Marsh Energy Practice
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
The 100 Largest Losses Marsh Energy Practice
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.
Vapour Cloud Explosion
24 December, 1989
Baton Rouge, Louisiana, USA
$69,000,000 $130,000,000
Refineries
The 100 Largest Losses Marsh Energy Practice
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.
Vapour Cloud Explosion
05 May, 1988
Norco, Louisiana USA
$290,000,000 $560,000,000
Refineries
The 100 Largest Losses Marsh’s Energy Practice
The 100 Largest Losses Marsh Energy Practice
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
Fort McMurray, Alberta, Canada
$160,000,000
Refineries
The 100 Largest Losses Marsh’s Energy Practice
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 $180,000,000
Refineries
The 100 Largest Losses Marsh Energy Practice
10
Refineries
The 100 Largest Losses Marsh Energy Practice
11
Petrochemical Plants
There appears to be only a weak trend within this data. This is perhaps as a result of petrochemicals assets being generally younger than their refinery counterparts, having been rebuilt after newer, more cost efficient technologies have been developed and implemented. Plant sizes though, are still believed to be generally increasing, which is perhaps reflected in the continuing loss figures in the more recent time periods. The high figure for the period 1985 – 1989 was dominated by two vapour cloud explosion events in the USA (at Pasadena and Pampa), which account for nearly 65% of the total for this timeframe, showing clearly the impact of true Estimated Maximum Losses, defined within Marsh as:
‘The loss that could be sustained under abnormal conditions with the failure of all protective systems.’
Petrochemical losses in five year periods
0 500 1000 1500 2000 2500 3000
2005 - 2009
2000 - 2004
1995 - 1999
1990 - 1994
1985 - 1989
1980 - 1984
1975 - 1979
US$ millions
11
The 100 Largest Losses Marsh Energy Practice
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
Petrochemical Plants
The 100 Largest Losses Marsh Energy Practice
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
Petrochemical Plants
The 100 Largest Losses Marsh Energy Practice
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.
Vapour Cloud Explosion
23 October, 1989
Pasadena, Texas, USA
$680,000,000 $1,300,000,000
Petrochemical Plants
The 100 Largest Losses Marsh Energy Practice
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.
Vapour Cloud Explosion
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
Petrochemical Plants
The 100 Largest Losses Marsh Energy Practice
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.
Vapour Cloud Explosion
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.
Vapour Cloud Explosion
01 June, 1974
Flixborough, UK
$58,000,000 $250,000,000
Petrochemical Plants
17
Gas Processing Plants
This sector of the industry does not present a particularly obvious trend either, with a small number of losses with large loss quantums characterising this section. There are also several periods where this sector of our industry does not have any events that make it into the ‘100 Largest Losses’.
New plants and systems are being built to handle gas or liquefied natural gas (LNG) although again these recently built facilities often present good risk management and mitigation features such as good layout, good separation, and good levels of process isolation and gas detection.
Gas processing losses in five year periods
0 300 600 900 1200 1500
2005 - 2009
2000 - 2004
1995 - 1999
1990 - 1994
1985 - 1989
1980 - 1984
1975 - 1979
US$ millions
The 100 Largest Losses Marsh Energy Practice
The 100 Largest Losses Marsh Energy Practice
Gas Processing Plants
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
The 100 Largest Losses Marsh Energy Practice
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.
Vapour Cloud Explosion
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.
Vapour Cloud Explosion
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.
Vapour Cloud Explosion
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 $180,000,000
Gas Processing Plants
The 100 Largest Losses Marsh Energy Practice
20
Terminals/Distribution
The magnitude of losses at terminals and other points of distribution appears truly flat, but this sector now represents relatively few incidents in the 100 largest property loss ranking, largely due to the size of other events elsewhere in other sectors. Only six incidents have been used to generate this chart.
Of course, whilst some losses are dramatic and of great interest to the press and the general public, this level of interest is not always reflected in the financial loss incurred. Incidents of interest to the general public are often those with large plumes of smoke, inconvenience to the public, and ‘knock on’ damage, as well as, sadly, high levels of death and injury. The Buncefield tank farm fire in the UK was a good example of this, with the fire closing the local motorway and causing damage to a number of third party assets whilst not making this ‘100 Largest Losses’ document as the Property Damage figure was relatively low, particularly when compared to the third party and Business Interruption claims.
Terminals and Distribution losses in five year periods
0 100 200 300 400 500 600
2005 - 2009
2000 - 2004
1995 - 1999
1990 - 1994
1985 - 1989
1980 - 1984
1975 - 1979
US$ millions
20
The 100 Largest Losses Marsh Energy Practice
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 $200,000,000
21
Terminals/Distribution
The 100 Largest Losses Marsh Energy Practice
Upstream
22
The upstream loss data shows the, sadly, normal increasing trend in the magnitude of losses over the seven five year periods analysed, with the peak in the middle of the chart being due to the Piper Alpha incident when some 167 crew members lost their lives. This also represents the largest single Property Damage event (at current values) in this edition.
It should be remembered that the incidents identified in this document are generally loss events to a single facility, and as such therefore this analysis does not identify some of the larger aggregated losses from recent hurricane seasons in the Gulf of Mexico, which have each led to damage to multiple upstream assets (as well as some on-shore ones). The losses from hurricanes Katrina, Rita and Ike are still being finalised and therefore not included in this edition, but the cumulative effect of these single ‘incidents’ would rank these very highly in this list. In addition, examination of the complete loss data that we maintain shows that there has recently been a higher number of smaller magnitude losses that are not included in this graph, and this should be a cause for concern.
As with other sectors of the hydrocarbon and chemicals industry facilities are generally getting larger, and are being constructed to operate in deeper waters and harsher environmental conditions. Losses, when they do occur, are therefore larger, but it appears that the industry has learned from some of the serious incidents in the past, such as Piper Alpha, and newer facilities are better designed to prevent, detect, and mitigate the effect of releases. Drilling techniques also appear to be improving, with fewer losses from this activity.
Upstream losses in five year periods
0 1000 2000 3000 4000 5000
2005 - 2009
2000 - 2004
1995 - 1999
1990 - 1994
1985 - 1989
1980 - 1984
1975 - 1979
US$ millions
22
The 100 Largest Losses Marsh Energy Practice
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
The 100 Largest Losses Marsh Energy Practice
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
Fort McMurray, Alberta, Canada
$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
The 100 Largest Losses Marsh Energy Practice
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
The 100 Largest Losses Marsh Energy Practice
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
The 100 Largest Losses Marsh Energy Practice
Notes
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Oslo Vika Atrium, Munkedamsveien 45 D Oslo N-0123 Norway Tel: +47 22 01 10 00 Fax: +47 22 01 10 90
Madrid Edificio Puerta Europa, Paseo de la Castellana, 216 Madrid E-28046 SpainTel: +34 914 569 400 Fax: +34 913 025 500
Perth Exchange Plaza 2 The Esplanade Tel: +61 8 9289 3888 Fax: +61 8 929 3880
San Francisco 345 California Street Suite 1300 San Francisco, CA 94111-5421 United States Tel: +1 415 743 8000 Fax: +1 415 743 8080
Singapore18 Cross Street #04-03 Marsh & Mclennan Centre Singapore 048423Tel: +65 6327 3150 Fax: +65 6327 8845
Visit our website at: www.marsh.com