Blast rips through Mexico oil refinery, kills one

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CADEREYTA, Mexico– An explosion ripped through a major Mexican refinery on Tuesday, killing one worker and pushing gasoline prices higher on market talk that Mexico's state oil company Pemex might have to import more fuel.
Pemex, the world's seventh largest oil producer, said a 32-year-old engineer was killed and two workers were severely burned when a compressor leak at the Cadereyta refinery's gasoil hydrotreater unit triggered an explosion and a fire.
While authorities subdued the fire, Pemex did not say how the accident impacted operations at Cadereyta, the third largest and most sophisticated refinery in Mexico with a capacity of 275,000 barrels per day.
"We felt the windows shake. It was only a few seconds, but the whole building shook," said Jose Luis Garza, a government employee in Juarez, about 20 minutes from the refinery in northern Mexico.
The blast could force Mexico, which already relies on imports for more than 40 percent of domestic gasoline demand, to significantly boost fuel imports.
The explosion comes in a year marred by serious accidents in the North American oil industry, including the Deepwater Horizon spill, a major pipeline accident in Michigan and an explosion at a Gulf of Mexico natural gas platform.
Francisco Montano, a Pemex spokesman in Mexico City, said the blast took place in one of the refinery's hydrotreating units, which removes sulfur from fuels under high pressure in the presence of explosive hydrogen gas.
Pemex, which must import fuel due to a lack of refining capacity, bought 432,000 barrels a day of fuel from the United States in June, making it the top importer of U.S. refined products, according to the U.S. government.
U.S. RBOB gasoline futures jumped after the explosion, and were trading 1.44 percent higher in New York.
"Mexico is already short of refining capacity and this will make it even shorter," said Antoine Halff, deputy head of research at Newedge Group in New York. "It could well raise oil product prices as Mexico needs to increase imports."
A Gulf Coast products trader said it was "hard to gauge" whether Pemex would pull more U.S. exports in the aftermath of the explosion. "Pemex already moves a lot of cargoes off the Gulf Coast," the trader said.
Pemex, struggling under a mountain of debt and rapidly aging oil fields, is studying a plan to import crude oil for the first time in over three decades to improve the profitability of its refineries.
Oil exports account for about a third of government revenues in Mexico, which is struggling with its deepest recession since 1932.
(Additional reporting by Robert Campbell, Cyntia Barrera Diaz, Miguel Angel Gutierrez and Catherine Bremer in Mexico City and David Sheppard and Joshua Schneyer in New York, Kristen Hays in Houston; Editing by Kieran Murray and Sofina Mirza-Reid)