* Repairs expected to be completed quickly * CDU repairs not seen impacting Carlyle's decision By Jeffrey Kerr and Janet McGurty NEW YORK, May 10 Sunoco Inc worked to quickly restore production at one of four key crude units at its Philadelphia refinery on Thursday, while analysts considered what impact this week's small fire may have on advanced talks to sell the plant. The CDU at Sunoco's 355,000 barrels-per-day refinery will likely restart within one or two days after a hole due to corrosion was discovered following a brief fire on Wednesday, a source familiar with the situation told Reuters on Thursday. A Sunoco spokesman declined to comment on Thursday. While small flares like the one that forced operators to shut the unit are not unusual at refineries, the incident comes at a delicate time as Sunoco is in the final stretch of talks to sell the aging plant -- the largest on the East Coast -- to private equity firm Carlyle Group. Since those negotiations were made public a month ago, two others deals have emerged that would revive mothballed refineries in Pennsylvania and the Caribbean, threatening to stymie an expected recovery in Atlantic Basin refinery margins. "The fire didn't appear to be serious from what I've heard and if that is correct, I wouldn't think it (by itself) would normally cause the deal to be scuttled," said John Auers, refinery expert with Houston-based Turner Mason. ConocoPhillips' recent deal to sell its 185,000 bpd refinery in neighboring Trainer to Delta Airlines had already cast a new light on the Carlyle sale, he said. Earlier this week Reuters reported that PetroChina Co Ltd was in talks to buy Valero Energy's shuttered 235,000 bpd refinery in Aruba. "Considering that, there is always the possibility that something like this fire could become 'the straw that broke the camel's back,' especially if reliability issues were of some concern anyway," Auers added. TANGENTIAL The hole in the Philadelphia refinery CDU was being repaired and scaffolding was built to allow the inspectors in to look at the unit, said the source. The fire was extinguished in the CDU early Wednesday morning. Other units continued to operate. "Equipment wears out and needs to be replaced. It is part of owning a refinery. This should be tangential" to the talks with Carlyle Group, said Mark Routt, senior consultant at energy advisor Houston-KBC Advanced Technologies. On Wednesday, a spokesman for Sunoco said as far he knew the two parties were still talking. The Philadelphia plant will be closed by the end of July if a deal is not reached as Sunoco exits the refining business to focus on terminals and pipeline. The refinery, which lacks the sophisticated downstream capacity to process heavy, sour crude streams into high value gasoline and diesel, turned to high-acid crude oils in recent years in an attempt to boost refining margins, said traders and market analysts. Among the pitfalls of running high-acid crude streams through the CDU are metal fatigue and corrosion, requiring more frequent maintenance. Discussions between Carlyle and Sunoco have included issues of reliability since the pact was agreed upon, a source said. Discussions with the Environmental Protection Agency (EPA) and federal and local government were also ongoing. Strong support by local and federal legislators like Sen. Bob Casey and Governor Tom Corbett have been instrumental in working to keep the refineries operating, savings job and bolstering supply security in the region.