SKIKDA REFINERY FIRE EXPECTED TO HAVE NO EFFECT ON

UNCLAS ALGIERS 002055 SIPDIS SENSITIVE E.O. 12958: N/A TAGS: EPET ETRD EWWT PTER PINR ASEC AG SUBJECT: SKIKDA REFINERY FIRE EXPECTED TO HAVE NO EFFECT ON PRODUCTION ¶1. (U) This cable has been sent sensitive but unclassified; please protect accordingly. ¶2. (SBU) Algeria's second largest crude oil refinery at Skikda experienced a fire October 4 that burned through the night and into today. Early morning reports to us from local industry officials said the fire had spread to three crude shoretanks. While local firefighters had managed to stop the spread of the fire, all units within the refinery were down and industry representatives were doubtful any vessels would be loaded in the next few days. Later in the morning, however, Skikda Sonatrach officials told EconOff that production would not be affected by the incident, and vessels would be loaded as normal. As of 10:30 am local time, industry sources on the ground reported to us that two tanks were still on fire within the confines of the crude tank farm, which comprises 18 tanks. They also reported that a vessel docked alongside the terminal waiting to load a cargo of fuel oil was unaffected. Industry representatives told EconOff that not all the lines and tanks at the refinery had been affected (which tracks Sonatrach information),but the refinery has not yet resumed operations. ¶3. (SBU) According to Ministry of Energy sources who spoke with us, an electrician contracted to replace an electrical pylon set off a spark that caused the fire and spread to a crude storage tank. The electrician burned to death and was the sole fatality reported. Four colleagues of the electrician were also reported in critical condition from burns. Previous reports of an explosion at the facility appear to be erroneous, as do initial unconfirmed casualty reports of 27 dead and 600 injured. ¶4. (U) Background: Skikda is Algeria's largest crude oil refinery with a designed capacity of 323,000 barrels/day. The plant can process 15 million tons/year of Saharan Blend crude and 300,000 tons/year of sour crudes imported through the Skikda oil terminal, which is linked to the refinery by pipeline. Algeria exports 1.4 million barrels of crude oil daily, of which about 85% is destined for Western Europe. Italy is the main market, followed by Germany and France. The U.S. market accounts for the bulk of the remaining 15% of Algeria's crude oil exports. Algeria is the third largest U.S. source of liquefied natural gas imports at approximately 120 billion cubic feet per year. ERDMAN