August 30, 2013 / 5:47 PM / 4 years ago

Exclusive: Venezuelan refineries operating at 74 percent - internal PDVSA document

HOUSTON (Reuters) - Venezuela’s network of refineries, including the Isla unit, is operating at 74 percent of capacity, running 1.2 million barrels per day (bpd) of crude, according to an internal report from state-run PDVSA seen by Reuters on Friday.

Fires, small explosions and power cuts have hit the 1.62 million bpd chain of Venezuelan refineries since July. These latest woes have further affected output, which was already suffering from a major explosion at the Amuay refinery last year.

The internal report seen by Reuters is significant because Venezuela, one of the world’s major oil producers, generally does not disclose production and refinery data beyond annual reports.

The problems have forced Petroleos de Venezuela (PDVSA) to look for imported petroleum products - a growing trend that is affecting the country’s balance of payments months after President Nicolas Maduro took office.

Maduro, a vocal critic of the United States, succeeded his mentor, Hugo Chavez, who died in March. Maduro has faced a number of economic problems since his election in April, including annualized inflation of 43 percent and shortages of consumer goods.

One trader close to PDVSA’s purchases told Reuters this week that the company, which owns a chain of four domestic refineries and rents the 335,000 bpd Isla in Curacao, will import several cargoes of diesel and catalytic gasoline in the coming weeks to supply its internal market.

“The alkylation unit number 1 and TAME (tertiary amyl methyl ether, used to oxygenate gasoline) are down due to operational problems in Cardon. The vacuum unit number 3 shutdown continues due to the fire that occurred on August 13th,” the report says, updated on August 23.

Amuay and Cardon make up the Paraguana Refining Center (CRP) on the west coast of Venezuela. With a combined capacity of 955,000 bpd, it is considered the world’s second-largest refinery.

The report adds that a chimney fire that occurred last week at Amuay did not affect operations but that the catalytic cracker and one alkylation unit at the mid-sized El Palito refinery are working at reduced rates due to operational problems.

Puerto la Cruz, which is operating at almost full capacity after a fire occurred this month in an area containing hydrocarbons waste, plans to restart its ultra low sulfur diesel (ULSD) hydrotreater unit at the end of August, according to the document.

Venezuela has a long-term supply contract to sell most of its 44,000 bpd capacity of ULSD to Europe, but part of that volume is being used to satisfy a growing chain of domestic thermoelectric plants.

Bajo Grande, the smallest refinery in Venezuela, with a capacity of 16,000 bpd and attached to the CRP, is shut down due to operational problems.

After several months of failures, including a total power blackout in July, Isla is running well below capacity because of frequent problems with power, steam and water services.

    CRUDE SUPPLY

    The trader told Reuters that the Venezuelan purchases of finished fuels are now frequent, since a severe explosion rocked Amuay one year ago, leaving more than 40 people dead.

    But crude operations of PDVSA have been normal in the last months, with the four crude upgraders working at a rate of 81 percent, the report says, adding that no maintenance work is scheduled until the end of October.

    The upgraders, which convert up to 650,000 bpd of the extra-heavy crude into an exportable product, are operated by joint ventures between PDVSA and France’s Total (TOTF.PA), Norway’s Statoil (STL.OL), U.S.-based Chevron (CVX.N) and Russia’s Rosneft (ROSN.MM).

    The document added that in September PDVSA plans to export from its main terminal in Venezuela and the storage facility Bullenbay in Curacao an average of 1.44 million bpd of crude, mostly the Orinoco belt’s Merey 16 blend.

    The Isla refinery and the Bullenbay and Bopec terminals at Banaire are used by PDVSA to export crude in big VLCC tankers to Asian markets.

    Merey 16 is produced by PDVSA and China National Petroleum Corp (CNPC) from extra-heavy Orinoco crude using diluents - without processing in upgraders. This allows for easier exporting than relying on upgraders.

    Reporting by Marianna Parraga; Editing by Terry Wade and Steve Orlofsky

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