A 200m exclusion zone was set up around the site where oxyacetylene is stored.
The fire at the site, which sits next to the railway line, has caused train services to be cancelled between Oban and Connel Ferry during the day. Scotrail said it expects the 'major disruption' to last until 5.30pm today (Wednesday November 17).
‘Trains services between Glasgow Queen Street and Oban will be terminated at and started back from Taynuilt. Oban and Connel Ferry cannot be served by train
‘Scottish Fire and Rescue are onsite, the fire is now extinguished, however the cooling process is ongoing.’
ScotRail has arranged for rail tickets to be accepted on CityLink bus on the 976: Glasgow – Arrochar & Tarbert – Dalmally – Loch Awe – Taynuilt – Connel – Oban routes.
Neighbours heard a big bang from the yard shortly before 8.30am this morning.
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Two fire appliances were quickly on the scene but the flaming oxycetylene cylinder raised fears of the building roof potentially being blown off. Firefighters are now waiting for it to cool down and be safe enough to tackle.
John Williams, who lives nearby, was told at 9.15am to leave his home and warned it could be hours before it was safe enough to return.
'At least it's a decent day,' he added.
It is understood the new depot was ready for an official opening later this month.
As well as workshops where welding is carried out, there are welfare units, a salt barn and fuel storage on the site.
A Scottish Fire and Rescue Service spokesperson said: 'We were alerted at 8.23am on Wednesday November 17, to reports of a fire in Mill Park Road, Oban.
'Operations control mobilised two fire engines and firefighters are working to extinguish the flames. Crews will remain in attendance until the area is made safe.
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