* Lightning started blaze in two El Palito storage tanks
* One tank was quickly extinguished, refinery is operating
By Marianna Parraga
CARACAS, Sept 21 Firefighters battled a blaze in a fuel storage tank at Venezuela's El Palito oil refinery for a third day on Friday, but the intensity of the flames had reduced and authorities expected it to be extinguished soon.
The 146,000 barrel-per-day (bpd) El Palito facility is still operating, but the second refinery accident in a month has increased concerns about state oil company PDVSA's safety record and practices ahead of an Oct. 7 presidential election.
"The tank is almost extinguished. The refinery's operating," Oil Minister Rafael Ramirez told Reuters.
A lightning bolt set fire to two naphtha storage tanks at the facility during a storm on Wednesday night. PDVSA crews were able to put out one of the fires within hours, but the blaze in the second tank has proved more stubborn.
The tanks were at some distance from the processing units at the refinery, so officials said there had been no need to halt production. In August, PDVSA halted almost all output at the country's biggest refinery, Amuay, for six days after a gas leak caused an explosion that killed 42 people.
Robert Gonzalez, a union leader at El Palito, said the company had brought in fire-fighting foam from other facilities.
He said his union had warned about a lack of some firefighting equipment at the refinery. "Thank God the equipment relating to the tanks is in good condition because the maintenance was done recently," he told reporters.
No one was hurt in Wednesday night's lightning strike. Some residents who had left the area in fear began to return to their homes on Friday, complaining about a lack of official information amid the confusion when the fires first broke out.
PDVSA has suffered a string of accidents, outages and unplanned stoppages for maintenance across its refinery network in recent years, hurting the OPEC nation's vital fuel exports.
Traders are watching Venezuela closely after the latest problems at Amuay and El Palito. This year, the country reduced its shipments of derivatives to the United States to just 38,000 bpd in June, down from 68,000 bpd in January, according to the U.S. Energy Information Administration.
"Exports are normal. They are under control," said Ramirez. He has repeatedly said Venezuela is not importing finished fuels - just components - including after the Amuay blast.
One fuel trader said "not much" was coming out of Venezuela in terms of exports, but gave no more details. The trader asked not to be named because they do business with PDVSA.
The Venezuelan government stopped publishing certified production and export data in March 2011, adding to skepticism about its own pronouncements on the industry's performance.