February 28, 2018 / 7:11 PM / 8 months ago

UPDATE 1-Venezuelan PDVSA's refineries to run at 43 pct capacity in March -document

(Adds details on each refinery, context and quote)

By Marianna Parraga

HOUSTON, Feb 28 (Reuters) - Venezuelan PDVSA’s refineries will operate at 43 percent of their total capacity in March due to a lack of spare parts, light crude and feedstock, according to an internal document from the state-run firm seen by Reuters on Wednesday.

The company’s refineries in Venezuela and the Caribbean have been hit by the OPEC-member’s oil output decline, leaving PDVSA short of the crude grades its facilities need to produce fuels for the domestic market and for export.

A severe lack of cash stemming from export and production declines has led to delays in buying spare parts and equipment for needed maintenance, while limiting the volume of imported products, diluents and feedstock the firm can afford.

PDVSA’s refining network plans to process 701,000 barrels per day (bpd) of Venezuelan and imported crude next month, a slight increase versus an average of 660,000 bpd in March last year. That is still low compared to its total installed capacity of 1.62 million bpd, including the Isla refinery in Curacao.

The Venezuelan domestic market’s fuel consumption, which surpassed 700,000 bpd a decade ago, has declined in recent years amid a long economic recession, hyperinflation and lack of basic medicine and food, which are forcing Venezuelans to skip meals and leave the country.

PDVSA estimates the domestic market will consume some 425,000 bpd in March. But because of its refining system’s low operating level, PDVSA’s declining output and oil-for-loan pacts requiring the firm to export fuels to repay debts, the company will still require 293,200 bpd of imported products, diluents and crude in March, the report said.

Last year, Venezuela faced intermittent shortages of gasoline and other fuels.

PDVSA has ramped up its requests to buy imported crude and fuels on the open market since December. Last week it awarded tenders to buy Russian oil, gasoline blend stock, catalytic naphtha, vacuum gasoil, diesel and components for gasoline, according to offers seen by Reuters.

CONSTRAINTS

The 655,000-bpd Amuay refinery, Venezuela’s largest, will process 303,000 bpd of crude next month due to lack of spare parts and equipment malfunctions, the report said. That volume includes 35,000 bpd of upgraded oil coming from the Petropiar joint venture with U.S. oil firm Chevron Corp .

Amuay’s flexicoker, delayed coker, hydrotreater, alkylation unit and one of its crude distillation units are expected to remain out of service, while its fluid catalytic cracker (FCC) and two other distillation units will operate with limitations, the document said.

At the 310,000-bpd Cardon, two crude distillation units will remain under maintenance, while two hydrotreaters, the alkylation units, the hydrodesulfurization unit (HDS) and the catalytic cracker will operate with restrictions due to lack of input, limiting crude processing to 110,000 bpd.

Venezuela’s two smallest refineries, the 187,000-bpd Puerto la Cruz and the 146,000 bpd El Palito, will also operate with constraints due to insufficient feedstock and lack of spare parts, according to the report.

“We are considering importing crude for El Palito refinery to maintain in service the distillation and medium conversion units,” the report said.

El Palito is expected to process 85,000 bpd and Puerto la Cruz will process 146,000 bpd in March.

The Isla refinery in Curacao will process 56,000 bpd in March due to maintenance work planned to finish in mid-April at one of crude distillation units, the alkylation unit, the FCC, the hydrotreater and the reformer. Most of the crude input will come from imports, according to the document. (Reporting by Marianna Parraga Editing by Tom Brown)

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