PdV restarts gasoline production at El Palito

Spanish Market: Crude oil, Oil products
21/07/20

Limited gasoline production has resumed at Venezuelan state-owned PdV's 140,000 b/d El Palito refinery for the first time since 2017, but the 305,000 b/d Cardon refinery has suspended gasoline output while a distillation tower is repaired.

El Palito is currently producing up to 20,000 b/d of 87-91 octane gasoline, following jury-rigged repairs with parts cannibalized from the currently inoperative 635,000 b/d Amuay and 190,000 b/d Puerto La Cruz refineries.

Cardon's only operational distillation tower malfunctioned on 17 July, knocking out up to 30,000 b/d of gasoline that was being produced by the plant's 86,000 b/d fluid catalytic cracker.

Cardon's FCC was first restarted in June but efforts to boost production have failed on a succession of equipment breakdowns, fuel leaks, compressor failures and two fires on 6 July.

PdV crews have been unable to stabilize Cardon's FCC and distillation units because they are working with a combination of rebuilt parts and imported Iranian and Chinese parts that are incompatible with the proprietary US technologies that PdV has traditionally relied on.

"We are now producing barely 20,000 b/d of gasoline at El Palito when we expected to be producing up to 50,000 b/d from the start of this week," a PdV downstream manager tells Argus.

Managers at Cardon and El Palito remain optimistic that PdV's gasoline production could rise to as much as 60,000 b/d by the end of July, still well below estimated national gasoline demand of up to 110,000 b/d, a level suppressed by the country's economic and health crises.

But PdV's increasingly disgruntled and depleted workforce pose a growing challenge. Senior oil union officials at PdV refineries threatened late yesterday to shut down all gasoline production unless PdV honors a months-old pledge to pay refinery workers cash bonuses of $150 for successfully repairing key units.

Union officials denied claims made yesterday by Carabobo governor Rafael Lacava that El Palito since the past weekend is producing 50,000 b/d and up to 6,000 b/d of LPG, which is also in short supply.

"El Palito now is only producing 20,000 b/d of gasoline, and until Cardon resumes gasoline production, hopefully within the next seven to ten days, El Palito's gasoline production is all Venezuela has to rely on," one union official tells Argus.

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