Exclusive: Venezuela Amuay refinery operations seen normal by year-end

CARACAS (Reuters) - Venezuela's 645,000 barrel per day (bpd) Amuay refinery should be operating normally at about 500,000 bpd by year-end once it finishes repairs to a distillation unit damaged by an explosion in August, the country's energy minister said.

State oil company PDVSA had initially said the August 25 blast that killed more than 40 people had only affected storage tanks of its largest refinery. Amuay has been operating at around 50 percent capacity since then.

Rafael Ramirez, who is also PDVSA president, told Reuters that Amuay's management determined that the explosion had damaged a furnace at a 180,000 bpd facility, one of five distillation units at Amuay.

"The (replacement parts) arrive in December, and about three weeks after that we should have that unit in service, so we can reach the operational level the refinery was at before the incident, which was about 500,000 barrels per day," he said.

The Amuay accident was the one of global oil industry's most deadly in recent years, nearing the toll of a fire that killed 56 people in 1997 at India's Visakhapatnam refinery.

Venezuela's refineries are operating at 64 percent of their 1.3 million bpd capacity, according to calculations by PDVSA workers, compared with an average of 80 percent of capacity over the last two decades. This is lower than the industry average because of an increasingly heavy crude diet and frequent accidents and outages.

Amuay had the lowest capacity utilization factor of Venezuela's refineries in 2011, according to data Venezuela provided to OPEC.

Ramirez confirmed a Reuters report last week that PDVSA was not selling spot market fuel cargoes. He added the company is not having trouble meeting domestic fuel market demand or long-term supply contracts because of extensive inventories.

But there is not sufficient surplus for spot market fuel exports, he said.

Fuel sales to United States were already in decline at the time of the Amuay refinery accident, because Venezuela has dedicated a growing portion of its fuel shipments to repaying loans made by China through oil-for-financing arrangements.

Fuel exports to the United States dropped to a historic low of 52,000 bpd between January and August, according to U.S. Energy Information Administration.

(Writing by Brian Ellsworth; Editing by Marguerita Choy)

Source: http://news.yahoo.com/exclusive-venezuela-amuay-refinery-operations-seen-normal-end-160749237--finance.html

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