Venezuela turns to refinery restart after containing fires

Oil refinery Oil refinery

Venezuelan authorities will turn their attention to resuming production at the country’s biggest refinery after putting out fires at fuel storage tanks.

Firefighters battled blazes at naphtha storage tanks since Aug. 25 when a gas explosion at the Amuay refinery erupted into a ball of flames that engulfed a military post as well as nearby homes and shops, killing at least 48 people. Amuay will be restarted within days, Oil Minister Rafael Ramirez said.

“The biggest problem we had is over,” Ramirez said today on state television. “Now we’ll continue with a cooling process and begin to check the main processing units.”

Amuay, which has the capacity to process 645,000 barrels a day, forms part of the Paraguana complex 240 miles west of Caracas. Damage was limited to the storage tanks and Venezuela has had enough gasoline inventories to meet all commitments, Ramirez said. An extended shutdown threatens supplies of refined petroleum products as U.S. Gulf Coast plants halt operations with Tropical Storm Isaac heading toward the region.

A gas leak that formed a cloud at the refinery exploded at 1:10 a.m. on Aug. 25, sending a ball of flame into the air and destroying a National Guard post and damaging about 500 homes. President Hugo Chavez, who faces elections in October, declared three days of mourning and ordered an investigation.

Gasoline Inventories

Venezuela has stockpiles of 4 million barrels of gasoline and other petroleum products and continues to produce 735,000 barrels of the motor fuel a day at plants, including nearby Cardon, according to Ramirez. State-owned Petroleos de Venezuela SA shipped five tankers of crude from Paraguana on Aug. 26, he said at the time.

“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.”

PDVSA is the sole owner and operator of the refinery. The blast is among the world’s deadliest at an oil refinery. Fifteen workers were killed at BP Plc’s Texas City refinery in 2005, while more than 50 people died in a fire at Hindustan Petroleum Corp.’s refinery in Visakhapatnam, India, in 1997.

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