Devastating fireplace could power Cuba to resort to floating oil storage

An inferno at Cuba’s largest oil storage facility has killed no less than one firefighter, injured many extra, and threatens to additional swell the gas import invoice for the impoverished island nation that depends on international oil for every part from transportation to its energy grid.

Cuban officers could must scramble to arrange costly floating storage capability to deal with imports aimed toward easing an acute gas shortage, sources and specialists mentioned on Monday.

Cuba depends on the two.4-million-barrel Matanzas terminal, about 60 miles (130 km) from Havana, for many crude and heavy gas imports and storage.

Helicopters throw water over gas storage tanks that exploded close to Cuba’s supertanker port in Matanzas. (Photo: Reuters)

Matanzas is Cuba’s solely terminal with the flexibility to obtain giant tankers rated for 100,000 tonnes of deadweight. It additionally serves as a hub for home oil output to be blended for supplying the nation’s energy vegetation, and for distributing imported gas and crude to native refineries.

A big fireplace spreading since Friday is predicted to spice up delivery and import prices. Cuba was already struggling to afford gas purchases, and international tanker freight charges have skyrocketed since Russia’s invasion of Ukraine.

Cuba now could have to hunt long-term tanker charters for its storage wants or smaller vessels to hold imports. This logistical drawback could be on high of restoration prices for the biggest oil trade accident in Cuba many years.

In the primary half of the 12 months, Cuba imported 57,000 barrels per day (bpd) of crude and gas from its major ally, Venezuela, Refinitiv Eikon knowledge confirmed. The imports arrive onboard shrinking fleets of previous tankers owned by Cuba or Venezuela.

The Cuban authorities has been ramping up purchases from others, together with Russia, to ease shortages which have led to lengthy strains of drivers at stations and to energy rationing. President Miguel Diaz Canel has complained about virtually unaffordable gas costs this 12 months.

The Liberia-flagged tanker NS Laguna is scheduled to reach in Matanzas subsequent week carrying some 700,000 barrels of Russian oil, based on Eikon. The vessel follows a supply of Russian gas oil to the nation in July.

If Matanzas’ containment partitions can cease the hearth from spreading to port berths, the receiving portion of the power might nonetheless be used for discharging imports and transferring the oil to smaller tankers for floating storage, specialists mentioned.

Once the hearth is extinguished, Matanzas’ berths could possibly be used to make an “u” to fill different vessels, which doesn’t characterize a troublesome technical problem.

A change to floating storage would possibly lead Cuba, a closely sanctioned nation, to ask the U.S. authorities for reduction from guidelines limiting the circulate of vessels touching the island’s ports, the specialists 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 skilled and former govt at Venezuela’s state oil firm PDVSA.

Following a fireplace of the proportions seen in Cuba, restoration sometimes takes time and tens of millions of {dollars} in repairs, based on analysts.

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

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