Venezuela oil refinery fire spreads as death toll reaches 48

A blaze at Venezuela’s largest refinery spread to a third storage tank as firefighters try to contain flames burning since an Aug. 25 gas explosion killed at least 48 people. Gasoline prices rallied in New York.

Oil Minister Rafael Ramirez said two of the fires at tanks holding naphtha at the Amuay refinery probably will burn out by tomorrow as firefighters contend with a third fire that started at 2:15 p.m. local time today. There was no structural damage to the processing units at the facility about 240 miles west of Caracas, he said, adding that exports haven’t been unaffected.

“We have to announce that a third tank which has had flames on its roof is also catching fire at this moment,” Ramirez, who is also head of state oil company Petroleos de Venezuela SA, said on state television. “We estimate that with the wind and conditions the two tanks should extinguish themselves by tomorrow, with this new tank we’re obliged to continue putting in all the effort to extinguish the fire.”

President Hugo Chavez, who faces elections in October, declared three days of mourning and toured the affected areas. The explosion occurred after a gas cloud formed and erupted into a ball of flames that engulfed a National Guard post as well as homes and shops in front of the refining complex. The shutdown threatens refined product supply as U.S. Gulf Coast plants halt operations as Tropical Storm Isaac heads toward the region.

Chavez said he ordered an investigation into the causes and said they won’t discard any hypotheses.

Gasoline Inventories

Venezuela has 4 million barrels of inventories of gasoline and other petroleum products and continues to produce 735,000 barrels of gasoline a day at plants, including nearby Cardon, according to Ramirez. Amuay, which has capacity to produce 645,000 barrels a day, will be restarted within two days after all of the fires have been extinguished, he said.

PDVSA, as the Caracas-based company is known, has 10 days of inventory to meet its supply obligations internally and externally, Ramirez said. The state-owned company shipped five tankers of crude oil from Paraguana yesterday, he said.

“It’s probably going to be far longer than their public statements given the track record we’ve seen of maintenance at PDVSA facilities over the last couple of years,” Andy Lipow, president of Houston-based Lipow Oil Associates LLC, said by phone. “I think it concerns the market that it could take a long time given that it’s their largest refining complex.”

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