Devastating fire may force Cuba to resort to floating oil storage

Aug 8 (Reuters) – An inferno at Cuba’s greatest oil storage facility has killed no less than one firefighter, injured many extra, and threatens to additional swell the gasoline import invoice for the impoverished island country that is dependent upon international oil for the whole lot from transportation to its energy grid.

Cuban officers may want to scramble to arrange pricey floating storage capability to maintain imports geared toward easing an acute gasoline shortage, assets and mavens mentioned on Monday.

Cuba is dependent upon the two.4-million-barrel Matanzas terminal, about 60 miles (130 km) from Havana, for many crude and heavy gasoline imports and storage.

Matanzas is Cuba’s simplest terminal with the power to obtain massive tankers rated for 100,000 tonnes of deadweight. It additionally serves as a hub for home oil output to be combined for supplying the rustic’s energy vegetation, and for distributing imported gasoline and crude to native refineries.

A big fire spreading since Friday is predicted to spice up transport and import prices. Cuba used to be already suffering to manage to pay for gasoline purchases, and world tanker freight charges have skyrocketed since Russia’s invasion of Ukraine.

Cuba now may have to search long-term tanker charters for its storage wishes or smaller vessels to elevate imports. This logistical downside could be on best of restoration prices for the most important oil business coincidence in Cuba a long time. learn extra

In the primary part of the 12 months, Cuba imported 57,000 barrels consistent with day (bpd) of crude and gasoline from its primary best friend, Venezuela, Refinitiv Eikon information confirmed. The imports arrive onboard shrinking fleets of outdated tankers owned via Cuba or Venezuela.

The Cuban executive has been ramping up purchases from others, together with Russia, to ease shortages that experience led to lengthy strains of drivers at stations and to energy rationing. President Miguel Diaz Canel has complained about nearly unaffordable gasoline costs this 12 months.

The Liberia-flagged tanker NS Laguna is scheduled to arrive in Matanzas subsequent week wearing some 700,000 barrels of Russian oil, in accordance to Eikon. The vessel follows a supply of Russian gasoline oil to the rustic in July.

If Matanzas’ containment partitions can prevent the fire from spreading to port berths, the receiving portion of the power may nonetheless be used for discharging imports and moving the oil to smaller tankers for floating storage, mavens mentioned.

Once the fire is extinguished, Matanzas’ berths may well be used to make an “u” to fill different vessels, which doesn’t constitute a hard technical problem.

A transfer to floating storage would possibly lead Cuba, a closely sanctioned nation, to ask the U.S. executive for aid from laws restricting the glide of vessels touching the island’s ports, the mavens mentioned.

“The most likely scenario now is that authorities will let burn the product remaining in the tanks while keeping the area as cold as possible by using water,” mentioned Lino Carrillo, a Canada-based professional and previous govt at Venezuela’s state oil corporate PDVSA.

Following a fire of the proportions noticed in Cuba, restoration usually takes time and tens of millions of greenbacks in upkeep, in accordance to analysts.

“Affected tanks will be useless after the fire and everything else connecting them within the containment walls,” Carrillo added.

Reporting via Marianna Parraga in Houston; Editing via David Gregorio

Our Standards: The Thomson Reuters Trust Principles.