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Mon 6 Oct 2008 11:41 AM

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Saudi refinery fire repairs could take months

Gasoline-producing unit shut down at kingdom's largest oil refinery forcing cut in output.

Saudi refinery fire repairs could take months
SAUDI CLOSURE: A gasoline-producing reforming unit at the Ras Tanura plant has been shut down after the fire in late August, affecting oil output. (Getty Images)

Damage from a fire in late August at a secondary unit at Saudi Arabia's largest oil refinery has cut output of gasoline and distillates and could take two to three more months to repair, industry sources said on Monday.

It was unclear which unit at the 550,000 barrels per day Ras Tanura plant was hit by the fire, sources said. But a gasoline-producing reforming unit at the plant has been shut down, two sources said.

A spokesman at state oil firm Saudi Aramco was unavailable for immediate comment on Monday.

"This has affected their exports of distillates and gasoline," said one industry source. "It has also meant there is more export of the feedstock for the unit. They have sold some naphtha."

Aramco has sold rare spot cargoes of naphtha, the feedstock for the reformer, for September and October loading, trade sources said.

"We heard that Aramco has had some issues with the reformer," said one source. "They don't usually offer spot (cargoes)."

The spot sales came at a time when naphtha supplies are overflowing in Asia and choking the region's petrochemical makers. Buyers with tanks already full are seeking to defer deliveries of naphtha cargoes.

Petrochemical producers across Asia have cut output due to poor margins on high oil prices and slower demand from China.

Top oil exporter Saudi Arabia has seven domestic refineries with total capacity of 2.1 million bpd. (Reuters)

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