By Joshua Schneyer, Timothy Gardner and Richard Valdmanis

(Reuters) - An unexplained blast this week at a liquefied natural gas (LNG) facility in rural Washington state, which injured workers, forced an evacuation and raised alarm about a potentially large second explosion, could focus attention on the risk of storing massive gas supplies near population centers.

The Monday incident at Williams Co Inc's massive gas storage site is a rare safety-record blemish among the dozens of U.S. LNG plants and storage sites, including towering tanks in packed neighborhoods of New York City, and near Boston.

Energy industry experts and opponents of new LNG plants alike said it may spur debate about safe handling of gas for cities increasingly reliant on the clean-burning fuel. At least a dozen new U.S. LNG export facilities are seeking government approval, and some have faced opposition on safety grounds.

Early Monday, a "processing vessel" at the Williams facility near the small town of Plymouth, Washington, exploded, spraying chunks of shrapnel as heavy as 250 pounds as far as 300 yards, according to local emergency responders.

The flying debris pierced the double walls of a 134-foot LNG tank on site, causing leaks. Five workers were injured, and local responders warned that vapors from the leaks could trigger a more devastating, second explosion. A county fire department spokesman said authorities were concerned a second blast could level a 0.75 mile "lethal zone" around the plant.

Everyone within a two-mile radius of the site was evacuated, and a bomb-squad robot was deployed to snap photos of the damaged tank to avoid putting workers at further risk. Some who did approach were reportedly sickened by fumes.

By late Tuesday residents were allowed to return and responders said the risk of a secondary explosion had been averted. Williams is investigating the incident alongside government agencies. What caused the explosion is not clear.

"This type of event raises the public's awareness that we're dealing with a combustible commodity," said Teri Viswanath, a natural gas market strategist at BNP Paribas in New York. "We take a lot of precautions in the industry to avoid them, but they do infrequently occur."

U.S. consumption of natural gas rose 12 percent between 2008 and 2013, fueled in part by the strong endorsement of the cheaper and cleaner-burning fuel by the administration of President Barack Obama. New shale drilling has also led to record natural gas output.

But delivering fuel safely is no small task. Concerns about gas distribution adds to controversy around oil shipments in railcars after recent fiery derailments, fertilizer plant safety following last year's West Texas disaster, and reports about the U.S. power grid's vulnerability to sabotage.

The blast in Washington came a day after utility PG&E Corp was hit with federal criminal charges for alleged safety lapses in a deadly 2010 gas pipeline explosion in California, and weeks after a building in Manhattan was razed by a natural gas explosion, killing eight.

Stephen Maloney, a senior risk consultant at Moody's Analytics with a background in LNG risk analysis, said the Washington incident could trigger a review of the risks posed by LNG facilities, including a fresh look at the probable frequency of accidents. Companies and regulators use risk models when considering permitting projects.

"While notable, the Plymouth event was not especially severe," Maloney said. "But, when you are dealing with very low frequency events, even for an event of limited severity, one data point has the potential to really change statistics."

UNLIKELY SCENARIO

To be sure, industry experts say U.S. LNG plants have a nearly spotless safety record.

At the Washington facility, Williams cools gas to around minus 260 degrees Fahrenheit, making it non-flammable. Leaked LNG would likely vaporize and dissipate, posing little explosion risk, several experts said. But vapors that are contained in a closed space or gather into a cloud could ignite.

"It's a very unlikely scenario," said Kent Bayazitoglu, an LNG expert with the Gebler & Associates consultancy in Houston, adding gasoline is a riskier fuel.

Companies hoping to build new U.S. LNG plants and other LNG facilities say safety technology, including containment dams around storage tanks, has improved in recent years.

"LNG is safer than many of the gases we use every day," said Darren Seed, vice president of investor relations at Westport Innovations Inc, which is currently working with seven engine manufacturers to design LNG-powered trucks and locomotives.

Most proposed LNG export plants would also be located far from population centers, reducing the risks from an incident. For a FACTBOX on U.S. LNG plants under review, click here:

But others cite what they say are red flags. A 2009 report by the U.S. Congressional Research Service warned that LNG spills can unleash explosive vapor clouds. A 2004 blast at an Algerian LNG facility killed 27 workers and injured many more.

Ted Gleichman, of the Sierra Club's national team on natural gas, said it is also "insane" to place LNG facilities on the earthquake-prone U.S. West Coast after the 2011 disaster at Japan's Fukushima nuclear plant.

"This tragic fire in Washington State demonstrates these facilities are inherently dangerous," he said.

TANKS LOOM LARGE IN CITIES

LNG export terminals can be far more complex than the Williams facility in Washington, a so-called "peak-shaving" site designed to store LNG to meet spikes in domestic gas demand. There are 59 U.S. peak-shaving facilities, according to the Energy Information Administration (EIA). For an EIA map, click here: http://www.eia.gov/pub/oil_gas/natural_gas/analysis_publications/ngpipeline/lngpeakshaving_map.html

Many peak shaving sites are located in or near major cities like Atlanta, Boston or New York.

National Grid operates two giant 1960s-era tanks in Brooklyn. Another New York site, operated by Con-Ed sits near La Guardia Airport in Queens. More than 722,000 people lived within two miles of the two sites during the 2010 Census, according to a Reuters analysis of data compiled by the Minnesota Population Center. (GRAPHIC: http://link.reuters.com/kuz28v)

"It's not a question of should we or shouldn't we have this infrastructure," said Henry Willis, director of the RAND Corp's Homeland Security and Defense Center. "It's a question of ... are we taking the right steps in terms of engineering requirements, oversight, and safety inspections to have confidence we are effectively managing the risk."

The New York tanks are double-walled, equipped with alarms, and other safety features, and the sites have never suffered a major incident. They are overseen by several government agencies and have detailed emergency response plans, operators said.

Dozens of other LNG storage tanks dot New England, many of which are supplied by the giant GDF Suez-operated Everett Terminal two miles from downtown Boston. The Everett hub has received more than 1,000 LNG cargoes since opening in 1971, and includes peak-shaving storage.

GDF Suez said it will monitor the findings of an investigation into this week's Washington State accident.

(Additional reporting by Ryan McNeil, Edward McAllister and Scott DiSavino in New York; Editing by Bernard Orr)