KIEV, Aug. 9 ā Ukraineās second-largest oil refinery, Linos, owned by Russian oil company TNK-BP, suspended operation in an emergency late Monday after lightning struck its equipment, the company said Tuesday.
The shutdown is extremely ill-timed and comes more than a week after two other big oil refineries, Lukoil-Odessa and Kherson NaftoPererobka, also owned by Russian oil companies, have closed for modernization.
The closure also coincides with a major increase in world oil prices, with the spot price of a barrel of crude oil closing at an all-time record $64 a barrel on the New York Mercantile Exchange on Monday.
The developments, coupled with a recent closure because of high oil prices of Galychyna, a small oil refinery, add upward pressure on gas prices in an already tight market.
The price of 95-octane gasoline, the most popular gas, rose 1.4% to 3.75 hryvnias per liter at most gas pumps in Kiev by the end of the day Tuesday, up from UAH3.70 in the morning.
āThe [Linos] management and other specialistsā¦ are taking steps to repair the damaged equipment,ā TNK-BP said in a statement. āThe timeframe for completing the repair will be reported later.ā
Heavy rains fell across much of Ukraine on Sunday and Monday, in some areas damaging power supply lines, that had been repaired by emergency crews on Tuesday, according to the Energy and Fuel Ministry.
TNK-BP said the lightning struck a power supply line causing a short circuit and a surge in electric current that had damaged an electric motor powering the central turbo-compressor of the reforming unit. The reforming unit is instrumental in production of 95-octane gasoline.
Although the refinery was equipped with a special box protecting the motor from such accidents, it had failed, TNK-BP said.
This is the second time when an apparent accident has shut down Linos refinery within the past three months.
A construction crane fell during Linos maintenance in early May, breaking some equipment and delaying restart of the refinery for two weeks in the middle of a gasoline crisis that had been sweeping Ukraine.
The shutdowns may trigger gasoline price growth and put mounting pressure on the government of Prime Minister Yulia Tymoshenko costing her popular support ahead of the general election in March 2006.
Some expressed concerns that gasoline difficulties may be part of a plan drafted in the Kremlin to hurt the Tymoshenko government and to help pro-Russian opposition parties score better at the general election.
Anatoliy Matviyenko, the head of the government in Crimea, said last month he had obtained information that all Russian oil companies had been preparing to shut operation of their oil refineries. He specifically mentioned Lukoil-Odessa, Kherson and Linos.
Days later, Lukoil shut its Lukoil-Odessa refinery for a three-year modernization, while a week after that Alliance Oil had decided to shut down Kherson refinery for several weeks.
Now, the lightning forced TNK-BP to shut Linos, leaving Ukraine with only two operational oil refineries ahead of a high demand season of winter grain planting.
Meanwhile, TNK-BP said Wednesday the Russian authorities had cut a back-tax claim against it by hundreds of millions of dollars. The oil joint-venture was hit last April by a total back-tax bill for 2001 of about $1 billion. (sb/ez)