Venezuela: refinery to restart in two days after fire

PARAGUANA, Venezuela Sun Aug 26, 2012 3:52pm EDT

A man scavenges through the debris as fire is seen in the affected area after an explosion at Amuay oil refinery in Punto Fijo in the Peninsula of Paraguana August 25, 2012. An explosion tore through Venezuela's biggest oil refinery on Saturday, killing at least 26 people, wounding more than 50 and halting the facility's operations in the OPEC nation's worst industrial accident in recent memory. REUTERS/Gil Montano

A man scavenges through the debris as fire is seen in the affected area after an explosion at Amuay oil refinery in Punto Fijo in the Peninsula of Paraguana August 25, 2012. An explosion tore through Venezuela's biggest oil refinery on Saturday, killing at least 26 people, wounding more than 50 and halting the facility's operations in the OPEC nation's worst industrial accident in recent memory.

Credit: Reuters/Gil Montano

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PARAGUANA, Venezuela (Reuters) - Venezuela's biggest refinery is on track to restart within two days, the energy minister said on Sunday, following an explosion on Saturday that killed 41 people in one of the global oil industry's deadliest accidents.

Energy Minister Rafael Ramirez said the fire resulting from the blast was contained in two storage tanks, reiterating that no production units had been affected by Saturday's pre-dawn disaster at the 645,000-barrel-per-day (bpd) Amuay refinery, which sits on a peninsula in the Caribbean in western Venezuela.

On Sunday, the skeletal remains of a National Guard barracks destroyed in the blast sagged amid broken concrete and rubble, to a backdrop of flames and huge plumes of smoke coming from the two burning tanks.

The explosion caused by a gas leak flattened some homes in the immediate vicinity, some of which were located just across the street from the refinery's fence. Puddles of petroleum mixed with water littered nearby roads.

The victims from Saturday included 18 National Guard troops and 15 civilians; six remain unidentified. On Sunday, two of the dozens of people wounded died in the hospital, a National Guard general told local media.

"The roof flew off the house, the fence was pulled up, the windows came out and broke on top of the kids' beds, it was horrible," said Ramon Diaz, 32, who lives in the nearby slum of Ali Primera. "We still scared, we look at those flames and we're still scared."

The incident is likely to have little impact on world fuel prices because Venezuela can use its existing fuel stocks to supply the South American country's domestic market as well as maintain exports.

Ramirez told Reuters that state oil company PDVSA was considering seeking floating storage in the area.

Families in the immediate vicinity of the blast were seen removing home appliances from damaged homes in trucks provided by PDVSA. Neither the company nor the government have made any statements about compensation for lost property.

Reuters witnesses said firefighters on Sunday did not appear to be trying to extinguish the blaze with foam as they had been on Saturday, suggesting that the authorities may have decided to let the remaining fuel in the tanks burn itself out.

Fire at one of the tanks that had been extinguished on Saturday broke out again overnight.

It follows a decade of repeated outages and accidents at installations run by state oil company PDVSA that have prompted allegations of mismanagement by President Hugo Chavez's government.

A PDVSA refinery official in a statement denied that the accident had been caused by inadequate maintenance.

AMONG THE DEADLIEST

"I want to honor these beloved brothers in arms of the National Guard who lost their lives fulfilling their duties," Chavez said in a statement. "With a tear in our hearts and our souls, we must bid farewell to so many comrades."

The blast ranks as one of the deadliest refinery accidents in the recent history of the global oil industry, approaching the toll of the 1997 fire at Hindustan Petroleum's Visakhapatnam refinery in India that killed 56, and topping the 2005 BP Texas City refinery blast that killed 15 workers.

Amuay had already partially shut operations at least twice this year due to a small fire and the failure of a cooling unit.

The high death toll was in part due to the location of the National Guard post, which was not moved when the refinery shifted the site of the storage tank area so that it was next to where troops were stationed.

Ramirez acknowledged to Reuters that the facility was too close to the refinery.

Many of Venezuela's oil installations have slum residences next to them, and in some cases are located in the middle of cities. In some places, families hang clothes out to dry on fences that surround small oil derricks.

Venezuela has traditionally been a key supplier of fuel to the United States, but U.S. reliance on the OPEC nation has declined sharply over the last five years due in part to repeated unplanned outages at Venezuelan refineries.

In the first five months of 2012, the United States imported just over 50,000 bpd of fuel from Venezuela, down from nearly 290,000 bpd in 2005, according to data from the U.S. Energy Information Administration. Venezuela still ranks among the top five suppliers of crude oil to the United States.

Amuay, together with a neighboring facility, forms part of the Paraguana Refining Center, the second-biggest refinery complex in the world, with an overall capacity of 955,000 bpd. Only India's Jamnagar complex is bigger, at 1.24 million bpd.

(Additional reporting by Matthew Robinson in New York; Writing by Brian Ellsworth; Editing by Daniel Wallis, Cynthia Osterman and Vicki Allen)

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