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Buncefield oil depot fire (2005)

On December 11, 2005, a gasoline tank overflowed at the Buncefield depot near London: a vapor cloud explosion, the largest peacetime fire in Europe, and about 750 million pounds in insured losses.

Definition

Hemel Hempstead, Hertfordshire, Sunday, December 11, 2005, shortly after 6 a.m.: Tank 912 at the Buncefield terminal, being filled with unleaded gasoline by pipeline, overflows. The gauge is stuck, and the independent high-level alarm cuts nothing. About 300 metric tons of gasoline pour over the roof and form a vapor cloud at ground level, which ignites. The explosion is far more violent than anyone expected from an unconfined cloud, and the fire that follows engulfs more than twenty tanks: the largest peacetime fire in Europe. Nobody dies, at dawn on a Sunday. There are 43 injured, and homes and offices damaged on the neighboring business park. Insured losses run to about 750 million pounds, across the depot, the neighbors and the business interruption of firms on the park. The main depot, HOSL, was a joint venture of Total and Chevron. In 2009, the High Court held Total liable: its employees ran the control room, and the de facto operator answered for their negligence (Colour Quest Ltd v Total Downstream UK Plc, [2009] EWHC 540 (Comm)). The neighbors' insurers, subrogated, could pursue recovery on that basis. For underwriting, Buncefield broke an assumption. An open-air vapor cloud was modeled as a slow deflagration with low overpressure; the vegetation and equipment on site were enough to accelerate the flame. The PML of a hydrocarbon depot has since been built on a vapor cloud explosion (VCE) scenario rather than on the tank fire alone. That inflated the amounts to be placed and turned inspections toward overfill protection. Not to be confused with Piper Alpha, where the gas explosion hit a manned platform at sea.

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Buncefield oil depot fire (2005): Special risks glossary illustration, AlgoPolis
Example

Textbook case, in numbers. A firm on the park loses offices insured for 12 million pounds and suffers 8 million pounds of business interruption. Its insurer pays 20 million less a 0.25 million deductible, or 19.75 million, then brings a subrogated recovery against the operator for that amount. The firm claims its deductible and 0.5 million of uninsured costs itself. The operator faces 19.75 + 0.25 + 0.5 = 20.5 million pounds for this one neighbor, which its liability policy picks up within its limit.

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Also known as

Buncefield, Buncefield explosion, Hemel Hempstead depot fire, Buncefield fire

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