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Fire shuts Bonaire oil terminal till wkend at least-UPDATE 4

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BONAIRE-OIL/ (UPDATE 4, PIX)

* Fire rages for 2nd day, photos show tall smoke column

* PDVSA terminal stores 12 million barrels, ships to China

* Government sees environment risk, blaze burning out soon (Recasts with terminal official)

By Nochi Willem

KRALENDIJK, Sept 9 (Reuters) - Shipping will remain halted at least until the weekend at a 12-million-barrel oil storage terminal on the tiny and pristine Caribbean island of Bonaire as a fire raged in a naphtha tank, a senior official said.

Bonaire is a popular scuba diving destination known for well protected coral reefs and crystalline water.

Venezuela's state oil firm PDVSA uses the site to mix and ship crude and products to China and the United States. The island sits 50 miles (80 km) off Venezuela's northern coast and is part of the Dutch Antilles.

Marine manager Francis Domacasse told Reuters firefighters were unable to do more to control the fire and that personal would only return to the site when the blaze was extinguished.

"After this, they are going have to do an inventory of the damage," Domacasse said. "No boat will go in today or tomorrow, for sure."

A dense cloud of black smoke and large flames could be seen from across the island on Thursday, raising concerns of environmental damage from soot-fall, gases and chemicals released by the fire.

Island Lieutenant Governor Glenn Thode said firefighters had decided to let the blaze burn itself out because they had insufficient foam to extinguish the 200,000 barrels of highly volatile naphtha that caught fire in an electrical storm on Wednesday.

Thode told reporters he estimated the fire would burn out later in the day and that there was little risk of it spreading to more of the Venezuelan-owned terminal's 23 storage tanks. Domacasse said intense heat was melting the metal tank but that cooling systems should stop the fire spreading.

Thode, who arrived at a news conference in a car blackened by smoke, said villagers who live close to the terminal had been ordered to stay indoors to avoid noxious gases if a dense plume of smoke drifted in their direction.

He said the government was worried about damage to the island's delicate ecosystem from gas and chemicals released by the blaze.

PDVSA has struggled with a series of fires and maintenance issues at its refineries in recent years but blamed this fire on a lightening strike.

The blaze began just one day after an explosion at a Mexican refinery killed one person and drove up prices for diesel and gasoline.

On Wednesday, a senior PDVSA official said the affected tank stored reserves of naphtha to be sent to Venezuela's onshore El Palito and Puerto La Cruz refineries when needed.

PDVSA officials were not available to comment on Thursday.

The terminal, known as BOPEC, also stores heavy crude, gasoline, distillates and residual fuel oils.

Photographs posted on a Bonaire blog (http://www.bonaire.web-log.nl/) on Thursday morning showed a thick column of smoke purportedly at the terminal.

Naphtha is a petrochemical feedstock used in Venezuela for high octane gasoline blending and crude blending. (Additional reporting by Irasi Jimenez in Willemstad; Writing by Frank Jack Daniel; Editing by Marguerita Choy)


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