Prosecutions

Essar Oil UK fined £1.65m after explosion at Stanlow oil refinery

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The UK oil division of the giant Indian business conglomerate Essar has been fined £1.65m for breaching health and safety law following an explosion at its Stanlow oil refinery in Ellesmere Port in Cheshire.


Although no one was injured, the blast in the early hours of 14 November 2013 caused internal structures to collapse, resulting in damage totalling more than £20m, Liverpool Crown Court heard.

HSE told the court that problems began during the start-up of the site’s main distillation unit, when extremely flammable hydrocarbons were allowed to enter an unignited furnace. The heat from another furnace nearby triggered the explosion which destroyed the furnace, starting a number of fires that the fire service had to bring under control.

The incident was reported to the European Union as a major accident under schedule 7 of the Control of Major Accident Hazards (COMAH) Regulations 1999.

HSE’s investigation found that Essar Oil UK Ltd had failed to take all measures necessary to prevent or mitigate a major accident, and there were three main health and safety failings. First, a safety critical valve was ordered and installed incorrectly and Essar failed to correctly validate its operation. Second, the company failed to adequately assess the installation of a new safety-critical trip by failing to recognise the system had a by-pass line which defeated the trip’s operation. Third, although Essar’s policy was to isolate the main fuel lines to the furnace, the hydrocarbons entered the furnace via a secondary fuel line which had not been isolated when shut down.

Essar Oil (UK) Ltd, of the Stanlow Manufacturing Complex at Ellesmere Port, pleaded guilty to breaching regulation 4 of the Control of Major Hazards Regulations 1999. It was ordered to pay prosecution costs of £57,644.80, in addition to the fine.

Speaking after the sentencing hearing, HSE principal inspector Joanne Eccles said: “The industry should take notice of this case, there were no injuries but mistakes were made and could have been prevented.”

In a statement, Essar Oil UK said: “We made clear to the courts from the outset that we accepted responsibility for the incident.

“We take this matter very seriously. Following the incident in November 2013, measures were put in place to ensure it could not happen again. No one at Stanlow was hurt and there were no effects on the general public off-site.

“Although the incident happened three-and-a-half-years ago, new sentencing guidelines introduced in February 2016 significantly increased the penalties previously available to the court which has been reflected in the size of the fine levied today.”

Essar Oil UK is a subsidiary of Essar Energy, which owns and operates a variety of assets in the power, oil and gas industries in India and the UK. In turn, Essar Energy is part of the larger Essar Group, an Indian business corporation with annual revenues of over $35bn and over 60,000 employees in 29 countries.

Essar Oil UK owns and operates the Stanlow oil refinery, which produces over 16% of the UK’s transport fuels. Essar Oil UK reported profits after tax of $244m (£196m) in 2015/16.

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