September 17, 2010 / 7:38 PM / 10 years ago

Oil terminal blaze could curb PDVSA exports to China

 * Bonaire terminal crucial for shipments to Asia
 * Facility still shut, fuel oil sales seen affected
 By Marianna Parraga
 PARAGUANA, Venezuela, Sept 17 (Reuters) - A huge fire that knocked a major Caribbean oil terminal out of action until further notice adds to the woes of Venezuela's state-run PDVSA and temporarily curbs its efforts to boost exports to China.
 Bonaire Island, a 12 million-barrel terminal that had been receiving up to 25 tankers per month, is an important conduit for supplies to Asia from the South American OPEC member.
 Combined with two other fires at a loading dock at PDVSA's Cardon refinery and at a terminal on island of Curacao, the shutdown at Bonaire complicates moves by President Hugo Chavez's government to ramp up its shipments to China to 1 million barrels per day (bpd). [ID:nN03115921]
 Only 3 percent of China's crude comes from Venezuela, but Beijing relies on Venezuela for 20 percent of its fuel oil imports, according to Chinese customs data.
  Graphic showing Venezuela oil exports to China:
  Factbox of PDVSA accidents: [ID:nN16170777]
 Traders say all the fuel oil bought by Beijing leaves from Bonaire and another large terminal in the Bahamas, and it is not clear when Bonaire might be functioning again.
 "This will affect fuel oil supplies to China. There are no large volumes available immediately to ship to the Bahamas and cover what has been dammed up in Bonaire," said one U.S.-based trader, who asked not to be named because he deals with PDVSA.
 The expected drop in shipments from Venezuela could relieve pressure in a depressed Asian market overflowing with supplies from the west, said a Beijing-based fuel oil trader.[FUEL/A]
  Another Chinese oil trader said they expected there might be some impact on fuel oil loadings from the Bonaire blaze, but had not been notified of any disruptions by PDVSA.
 PetroChina (0857.HK), Asia's top oil and gas company, lifts most of PDVSA's fuel oil with three to four very large crude carriers, or 5.4 to 7.2 million barrels, a month, traders say.
 PDVSA also uses the 21.5 million barrel Borco terminal on the island of Grand Bahama. But that is much further north, and the Venezuelan company's access to tanks there has been limited since it sold the facility two years ago. [ID:nN26209833]
 The U.S.-based trader said PDVSA could also not make up for any shortfall using fuel oil stored at its Paraguana Refining Center, which includes Cardon and is one of the biggest refinery complexes in the world, because recent rains had seeped into stocks there.
 Last week's fires are just the latest in a series of accidents and maintenance outages across PDVSA's refining and distribution network in recent months that have cut output and forced the continent's top crude producer to import products.
 One Chinese trader said on Friday that PetroChina's fuel oil loadings had not been affected yet by the fire at Bonaire.
 "We expect there might be some impact on our fuel oil loadings, but until now we have not been notified (by PDVSA) of any disruptions or change of loading schedules," the Beijing-based trader told Reuters. [ID:nTOE68G03A]
 China imported 3.09 million tonnes of fuel oil from Venezuela, or 95,000 bpd, in the first seven months of this year, according to official Chinese customs data. That was 5 percent more than the same period the year before. [O/CHINA3]
 Underlining the growing importance of China to Venezuela at the expense of the United States -- which has long been PDVSA's main customer -- traders say the Asian economic powerhouse appears to be one of few nations to have received increasing oil shipments during a period of declining production.
 Chavez said on Wednesday he would make a seventh visit to Beijing soon after legislative elections in Venezuela that are scheduled for Sept. 26. During his 11 years in power, relations with China have expanded sharply in a wide range of sectors.
 Reliable figures on Venezuelan shipments to Asia are hard to nail down, but Chavez says PDVSA is exporting nearly 500,000 bpd to China, and wants to boost that to 1 million bpd soon.
 A substantial volume -- almost 300,000 bpd -- is partly in repayment for Chinese loans, including one of about $20 billion that was agreed in April. [ID:nTOE63J06H]
 Lightning was blamed for the blaze at Bonaire in the Dutch Antilles, which also holds stocks of heavy crude, gasoline and distillates. It burned for nearly two days before being put out on Friday with the help of firefighting planes sent by PDVSA.
 Workers said this week there was still only limited access to the facility, and a local diplomat and market sources said it would remain closed until further notice. [ID:nN14114433]
 In one bit of good news for PDVSA, the loading docks at its 310,000 bpd Cardon refinery resumed work on Wednesday after Saturday's fire there briefly halted shipping. [ID:nN15145482]
 But the spate of accidents and the forthcoming elections have focused public attention on the management of the company, which is the financial engine of Chavez's socialist project.
 Jose Toro Hardy, a former senior director at PDVSA, blames the fires on lack of investment and the purging of skilled workers from its ranks: "Political speeches do not prevent accidents," he told the El Universal newspaper this week.  (Additional reporting by Daniel Wallis in Caracas and Chen Aizhu in Beijing; Writing by Daniel Wallis; Editing by Andrew Cawthorne and Lisa Shumaker)   

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