Concerns Raised Over Delayed Full Restart at Amuay

Production was halted by an explosion and the resulting fire.

Traders have expressed concern over reports that Venezuela is struggling to fully restart its Amuay facility after production at the refinery was halted by a August 15, 2012 explosion reported to have been caused by a gas leak.

On August 31, 2012 Jesus Luongo, director of PDVSA Refining and CEO Paraguaná Refining Center (CRP) said processing had "resumed safely and gradually" but the facility, which has a capacity to refine 645,000 barrels per day (bpd), is still not fully operational.

"Right now the major concern is how quickly the refinery will restart. If there are delays to this then certainly fuel oil production will be impacted," a trader familiar with Venezuela fuel oil cargo shipments to Asia told Reuters.

"So far there has been no news on what the situation is regarding cargo operations but needless to say we are anticipating some issues," they added.

According to the Reuters report, Venezuela typically exports between 8 and 10 million barrels of fuel oil into Asia through Petrochina, with between 2 and 4 million barrels being supplied into China, while the rest goes to the Singapore bunker market.

Traders speculated last week that the incident would leave supply in Singapore tighter for the second-half of September and early October saying it would take "at least one week to ramp up operations and have products ready for export again."

Venezuela is reported to be the third-largest exporter of fuel oil to Singapore after the Netherlands and the U.S., with 465,000 tonnes of fuel oil exported into the country in June, and 726,000 tonnes of fuel oil being exported in July.

Amuay, which forms part of the Paraguaná refinery complex, is Venezuela's largest and the world's second largest refinery complex.