Mexico refinery repairs to take 2 wks-Pemex source-UPDATE 3

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Friday September 10, 2010 11:28:01 PM GMT

* Repair to gas oil hydrotreater seen simple -source

* No major damage to process units -source'

* U.S. traders skeptical on forecast return date (Updates refinery status)

By Robert Campbell

MEXICO CITY, Sept 8 (Reuters) - Mexico's state oil monopoly Pemex should be able to quickly repair the hydrotreater at its 275,000 barrels-per-day Cadereyta refinery that was damaged in an explosion on Tuesday, a company source said on Wednesday.

The repairs should be complete within 14 days, the source said, who spoke on condition of anonymity because he was not authorized to discuss the issue with the media.

"It was an unfortunate accident because a worker was killed but the damage was not that great," the source said.

Initial surveys of the refinery show no significant damage to any process units, the source added.

The accident was caused by a leak in a compressor in the hydrogen recirculation segment of the coker gas oil hydrotreater, causing the explosion and fire that killed one worker and injured 10. The 40,000 bpd hydrotreater was immediately shut down following the accident along with the refinery's 54,000 bpd coker. Pemex said it would cut crude oil runs at the refinery by 15,000 bpd to approximately 200,000 bpd while repairs were being made.

The remaining 30 process units at the refinery are running normally.

Pemex said late on Wednesday in a statement it would restart the coker on Sept. 11 and it did not anticipate any significant disruptions to ultra-low sulfur diesel or gasoline production.

It did not give a restart time for the hydrotreater.

Some oil traders expressed skepticism that Pemex would be able to repair the unit as quickly as forecast.

"It is hard to believe they can be back in two weeks. To come back on a high pressure hydrotreater in two weeks after a fire looks aggressive."

The explosion at Cadereyta, Mexico's third largest refinery by distillation capacity and its most sophisticated facility, pushed up oil product prices on Tuesday on concerns it would force Pemex to increase fuel imports.

Oil product traders said it might be difficult to tell if Pemex was increasing imports given its already significant presence in the market.

Analysts said the incident would likely only influence prices in the very short term due to high fuel stocks in the United States. (Additional reporting by Joshua Schneyer in New York; Editing by Marguerita Choy and Carol Bishopric)

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