Loud bangs that Lyttelton residents thought were fireworks rang out before a blaze engulfed the hold of a tuna trawler last night.
Up to 60 firefighters and 16 appliances battled for 12 hours overnight to extinguish the fire on board the 60 metre fishing ship, Ocean Breeze.
They all donned breathing apparatus after discovering the trawler was leaking ammonia.
The toxic gas is still leaking from the vessel this morning and three fire crews and a command unit are still at the Stark Bros Ltd dry dock at Godley Quay.
Firefighters in oxygen masks are using a gas axe to cut a hole in the front hull of the ship.
They will try to remove its ammonia reserves which are used to refrigerate the ship.
Representatives of the ship's owners will reportedly go aboard shortly to survey the extent of the damage and the ammonia leak.
Southern fire communications centre shift manager Brent Dunn said an investigation is underway, and two fire safety officers are on the scene to establish the cause.
No one was on board the vessel before the fire started at around 5.30pm yesterday.
Environment Canterbury (Ecan) has been notified of the leak, and it's business as usual for the rest of Lyttelton Port.
Lyttelton Tunnel was initially closed last night to all but emergency vehicles, but is now open.
Amateur photographer Aaron Campbell raced over to Lyttelton from his Christchurch home when he heard of the blaze last night.
He arrived within around an hour of its outbreak, and captured the most striking images of the event.
Mr Campbell said local residents reported "a bang - or several bangs" and thought it was fireworks.