Pipeline rupture cuts PdV gasoline production

A crude pipeline rupture in western Venezuela cut state-owned PdV's gasoline production at the 305,000 b/d Cardon refinery to 20,000 b/d this week from about 55,000 b/d in mid-January.

The accident compounds the gasoline deficit across Venezuela, where pumps outside Caracas are mostly dry.

PdV's 940,000 b/d CRP refining complex, which includes Cardon and the 635,000 b/d Amuay refinery, was processing just over 154,000 b/d of crude at three distillation units before the rupture of a subsea section of the 143mi (230km) 26-inch Ule pipeline that links the east coast of Lake Maracaibo to the CRP. The possible rupture of a parallel natural gas line could not be immediately confirmed.

The CRP complex is currently processing a combined 60,000 b/d of crude, but only Cardon is producing gasoline.

PdV is producing up to 40,000 b/d of high-sulfur diesel at the CRP and the 190,000 b/d Puerto La Cruz refinery, PdV officials at the facilities said.

PdV is temporarily offsetting the loss of Cardon feedstock with crude and diluted heavy oil (DCO) shipped across from storage at its Jose and Puerto La Cruz operations in eastern Venezuela.

Domestic diesel supply has drawn attention in recent months after the previous US administration banned crude-for-diesel swaps by non-US companies in late October, exposing Venezuela to possible shortages that would aggravate power outages and food supply bottlenecks when stocks run out around the end of March. Venezuela has been subject to US oil sanctions since January 2019.

Labor union officials critical of PdV management say the Ule system is likely to suffer more ruptures because PdV is only patching it instead of installing new pipeline sections and seabed concrete bases. The company has also neglected maintenance, especially after former late president Hugo Chavez nationalized hundreds of oil services companies in 2009, they said.

CRP operational records seen by Argus show that subsea sections of the aging Ule pipeline has sustained three previous ruptures since February 2020. The gas line has ruptured at least in the same period.