Liverpool Crown Court was told that during the start-up of the main distillation unit, highly flammable hydrocarbons entered an unused furnace. Heat from another furnace triggered the blast, which started several fires that the fire service had to bring under control.
No one was injured but the incident, which happened on 14 November 2013, caused more than £20m worth of damage, including collapsed internal structures.
The Health and Safety Executive's (HSE) investigation found that Essar had incorrectly installed a safety critical valve and had failed to properly validate its operation.
The installation of a new safety-critical trip was also inadequately assessed by Essar as it did not note the system had a bypass line which defeated the trip's operation.
Though the company's policy was to isolate main fuel lines to the furnace, a secondary fuel line had not been isolated during shutdown. This allowed the hydrocarbons to enter the furnace, the HSE said.
Essar Oil UK pleaded guilty to breaching Regulation 4 of the Control of Major Hazards Regulations 1999 for failing to prevent a major accident. It was fined and ordered to pay costs of £57,645.
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."