(Adds size of spill, detail on cleanup, changes dateline)
By Karl Plume and Edward McAllister
Whiting, Indiana, March 25 (Reuters) - Oil leaked from BP Plc's Whiting refinery in Indiana into Lake Michigan after a malfunction at a recently upgraded processing unit on Monday afternoon, the company confirmed on Tuesday.
Between 10 and 12 barrels, or around 500 gallons, of crude oil spilled into the lake, according to a local CBS report citing a source. That would make this a relatively small discharge; last week, a pipeline owned by Sunoco Logistics Partners spilled 240 barrels into an Ohio nature preserve.
The leak had stopped on Tuesday and no injuries were reported, London-based BP said in a statement. It declined to comment on the volume of oil spilled.
As crews worked on the cleanup on this industrial stretch of shoreline, the effect on Lake Michigan was not immediately clear. Two dozen workers were shoveling up sand on the shore that looked lightly tarred by oil. A vacuum truck was sucking up oily water.
Oil spills are not uncommon in the United States, where drilling is at an all-time high and energy production is on the rise. Still, Monday's spill will probably spur more environmental opposition to the Whiting refinery, which has been under local scrutiny for releasing pollutants into Lake Michigan.
The spill may also be another blow to BP, whose reputation was tarnished by the Macondo well blowout in the Gulf of Mexico in April 2010. That was the worst offshore spill in U.S. history, spewing millions of barrels of oil into the ocean.
Only this month was BP allowed to bid again on new federal drilling leases after a two-year government ban was lifted.
"It's troubling to hear that this spill occurred," said Lyman Welch, Water Quality Program Director at the Alliance for the Great Lakes group. "It's a reminder that even when precautions are taken, spills occur into the Great Lakes and we need to be vigilant to protect out drinking water supplies."
BP laid down containment boom on the water and said the oil was confined to a cove between the refinery's wastewater treatment plant and a steel mill.
Winds pushed the oil toward the shore and cold temperatures were causing it to harden into a waxy consistency, making it easier to collect, BP spokesman Scott Dean said.
"I've had no reports of any wildlife impacted," said Dean.
The U.S. Environmental Protection Agency, the Coast Guard and state regulators were at the scene.
The largest crude distillation unit at the 405,000-barrel-per-day refinery was operating normally again on Tuesday after a malfunction led to the leak, Dean said.
The 260,000-bpd crude distillation unit, called Pipestill 12, was the centerpiece of a $4 billion refit of the Whiting refinery completed late last year to run large amounts of oil from Canada's tar sands fields in Alberta.
A crude distillation unit does the initial refining of crude oil coming into a refinery and provides feedstock for all other units at the plant.
The refinery has been increasing the amount of Canadian crude oil running through Pipestill 12 during the first quarter of this year.
Environmental groups opposed the BP upgrade, saying use of the Canadian crude would increase pollution from the refinery into Lake Michigan.
The Whiting refinery is the primary focus of BP's U.S. refining strategy to use only plants in the northern United States that have in easy access to Canadian crude oil. BP sold plants in Texas and California last year as part of the strategy.
BP's American depositary shares were up 0.8 percent at $47.09 in afternoon New York Stock Exchange trading. The company's stock rose 1.2 percent in London. (Reporting by Edward McAllister, Selam Gerekidan and Joshua Schneyer in New York, Arpan Varghese in Bangalore, Erwin Seba and Kristen Hays in Houston and David Sheppard in London; Editing by Lisa Von Ahn, Jeff Benkoe and Marguerita Choy)