PdV gasoline production stalls, diesel dwindles

Venezuela's state-owned PdV shut down the 305,000 b/d Cardon refinery late on 24 January after repair crews failed to patch at least two ruptures in a subsea section of the Ule crude supply pipeline.

Divers contracted by PdV reported that the 26-inch line requires more extensive repairs than the patch welds used in three previous ruptures since February 2020, according to three officials at the 940,000 b/d CRP refining complex with direct knowledge of the situation.

The CRP complex, comprised of Cardon and the nearby 635,000 b/d Amuay refinery, relies on the 143mi (230km) Ule pipeline for medium grade crude supplies produced by oil fields on the east coast of Lake Maracaibo.

The Ule pipeline is a critical midstream asset for the CRP's operations.

"Cardon and Amuay cannot compensate for the loss of the Ule pipeline by cabotaging DCO (diluted crude oil) and crude from our terminals in eastern Venezuela," the CRP manager said. "We simply don't have enough tanker capacity to move the crude volumes CRP requires by sea."

Cardon's 86,000 b/d fluid catalytic cracker and 54,000 b/d naphtha reformer, which were producing up to a combined 55,000 b/d of gasoline before local fishermen reported the pipeline's most recent rupture almost two weeks ago will remain out of service until repairs are completed.

In the two weeks since the latest incident, Cardon had been producing less than 20,000 b/d of gasoline and about 25,000 b/d of high-sulfur diesel, representing a fraction of Venezuelan demand.

PdV also shut down two crude distillation units at Cardon on 24 January, and the only partly operating distillation unit at Amuay was placed in recirculation mode.

CRP managers and a senior downstream official at PdV headquarters in Caracas would not comment on when the Ule pipeline might resume operations.

"The situation is being assessed and it could be a few days or weeks depending on the extent of the damage," a CRP manager said.

PdV currently is not producing any gasoline in Venezuela and diesel production has dropped to about 15,000 b/d at its 190,000 b/d Puerto La Cruz refinery where a single distillation unit has been partially operating since December.

Gasoline has been in short supply for months in the Opec country. Diesel now threatens to grow scarce as well, after the US cut off crude-for-diesel swaps in late October 2020. Advocates of the swaps are hoping the new US administration of President Joe Biden will reinstate an humanitarian exception to oil sanctions that would enable the swaps to resume.