New managers take helm at troubled PdV Gas

New management at Venezuelan state-owned PdV subsidiary PdV Gas is under pressure to address chronic LPG shortages and frequent explosions at LPG distribution plants.

In the latest incident on 24 August, a propane storage and filling plant operated by PdV Gas Comunal at Ocumare del Tuy in Miranda state exploded, disrupting supply in poor communities around Caracas.

The blast destroyed filling equipment and a small storage tank, but no injuries were reported as workers fled the facility when a fire broke out.

"There have been many explosions at the filling stations, because there is a shortage of personnel, and those who are filling the canisters lack experience," a former PdV Gas official told Argus.

PdV Gas Comunal is largely staffed by neighborhood community councils created in the early 2000s by the ruling United Socialist Party (PSUV). The filling plants suffer frequent fires and explosions that often are traced to improper equipment handling by the community-based company's untrained operators.

The deterioration of LPG supply and logistics coincides with a shakeup at PdV Gas last week. The new gas vice president on PdV's board of directors is Gustavo Gomez, who replaced Nemrod Contreras. The new chief executive of PdV Gas is Jose Primera, who stepped in to replace Nemrod's brother Wilder Contreras.

Neither of the new executives has known experience in the gas business.

According to an internal PdV Gas report seen by Argus, the managerial changes are related to alleged corruption.

The problems at PdV Gas reflect a wider economic and political crisis gripping the Opec country, which is the target of sweeping US sanctions aimed at removing President Nicolas Maduro.

Most Venezuelans rely on LPG for cooking. LPG is in short supply along with motor fuel as a result of breakdowns at PdV's refineries and a sharp upstream decline in recent years.

PdV flares an estimated 2bn cf/d of gas from onshore fields because it lacks infrastructure for transport and industrial consumption.