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Venezuela scraping by on dwindling gasoline supply

20 Sep 2017, 8.58 pm GMT

Venezuela scraping by on dwindling gasoline supply

Caracas, 20 September (Argus) — Venezuela's local gasoline supply could dry up in a single day if state-owned PdV's 940,000 b/d CRP refining complex is forced to shut down, company and oil union officials tell Argus.

The precarious state of Venezuela's refineries and worsening fuel shortages are the latest evidence of the Opec country's hand-to-mouth economy.

The CRP, which includes the 635,000 b/d Amuay refinery and nearby 305,000 b/d Cardon refinery, currently produces barely 70,000 b/d of 91 RON gasoline because key processing units are off line. These units, which include catalytic crackers and distillation plants, have been crippled by equipment breakdowns and crude supply shortages, a PdV downstream executive at the complex told Argus.

The CRP's current gasoline output covers about 41pc of estimated local demand of 170,000 b/d, down from a peak of 260,000 b/d in 2013, before oil prices collapsed the following year, according to an internal PdV document seen by Argus.

Current local diesel demand of 140,000 b/d has fallen from a peak of 210,000 b/d in 2013, the document states.

The sharp downturn in fuel consumption appears to reflect the wider economic slump, in which fewer Venezuelans have vehicles, and those who do lack spare parts to keep them running. At the same time, PdV is producing less crude, translating into lower throughput at its refineries, to the extent that they are operational.

The 146,000 b/d El Palito refinery in Carabobo state and the 190,000 b/d Puerto La Cruz refinery in Anzoategui state currently are not producing any gasoline because of persistent equipment problems, crude supply shortages and delayed imports of essential components as PdV struggles to find the cash to pay foreign suppliers, the PdV executive said.

"The catalytic cracking units at both refineries have been mostly out of service for almost two years," the executive added.

FUTPV union director Ivan Freites, a frequent critic of PdV's management, said the CRP's gasoline production capacity has degraded to the point that without imported components and additives it can only produce 110,000 b/d of 65 RON gasoline. This gasoline is further refined with imported additives to yield about 70,000 b/d of 91 RON gasoline.

At Amuay, where an olefins explosion killed more than 40 people in 2012, only two of five distillation units are operational, and the flexicoker and catalytic cracking units are only partly operational, Freites said. Cardon's catalytic cracker and distillation units also are operating "well below" nameplate.

The CRP increasingly operates more as a crude and gasoline blending facility than an actual refinery that processes crude into products, Freites said.

PdV's local fuel supply protocol calls for consistently maintaining gasoline and diesel inventories equivalent to 12-15 days of demand as a cushion against unexpected local disruptions.

But PdV currently "does not have any gasoline and diesel reserves, and operationally its local refineries only produce 41pc of one day's demand," Freites said.

If unexpected events such as a major power blackout force the CRP's shutdown, Venezuela "could be out of gasoline completely in a day," Freites said.

Local downstream operational difficulties have been aggravated by PdV's financial difficulties compounded by unusually intense hurricanes that have disrupted Caribbean tanker traffic and oil storage operations since last month, the PdV executive said.

"Foreign suppliers of crude, finished gasoline and other products needed for our refinery operations, and for which PdV was late paying in cash, decided to sell their cargoes to other clients with good credit," the executive said.

PdV imported almost 109,000 b/d of oil products from the US in June, the highest monthly level in the year to date and the highest level for June since 2013 when PdV was still making up for the Amuay blast, according to the latest data from the Energy Information Administration (EIA).

The data shows that a third of the products imported from the US in June was finished gasoline.

PdV chief executive Eulogio Del Pino today acknowledged growing gasoline shortages, but blamed them on US sanctions.

Washington imposed financial sanctions on Venezuela last month, effectively blocking PdV from raising new debt. The sanctions came on top of targeted individual sanctions on Venezuelan officials, including president Nicolas Maduro.

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