The explosion that rocked the New Orleans area shortly after 9 a.m. on Dec. 22, 1977, did much more damage than anyone who heard it could have guessed.

The blast destroyed Continental Grain Co.'s massive grain elevator in Westwego, which is across the Missisippi River from New Orleans, and 36 persons were killed in the worst series of such explosions that happened in several United States cities a year ago this month.

The long-range effects were appalling, too The explosion, which was caused when static electricity ignited volatile grain dust, wrecked 45 of the elevator's 72 silos, and it cut overall tonnage in the Port of New Orleans-the city's chief industry-by 9 percent in the fiscal year that ended June 30.

The port is heavily dependent upon grain trade, and Continental had "accounted for a rather large tonnage-substantially above 10 percent," said Edward S. Reed port director.

Despite this heavy loss, Continental last month announced plans for $200 million worth of construction in the New Orleans area, starting with a $30 million elevator.

"We would like to get this elevator constructed as soon as possible," said Thomas Dean, the company's vice president for development. "We hope to be in operation by the fall of 1980, and that means we must start quickly."

The new elevator will be designed to avoid grain dust explosions, and it will be able to handle a larger amount of grain, he said. However, it will be able to store only 4 million bushels; the ruined elevator was able to store 6 million.

Continental, which was founded in Belgium in 1813 and is based in New York City, has 18,000 employes world-wide, said Dean.

He said there is no timetable for the rest of the projects in the building plans for this area. Those undertakings include:

A soybean crushing plant to produce meal and oil. The plant could process about 1,500 metric tons of soybeans daily. An accompanying warehouse could house 25,000 tons of soybean meal and tanks that store 9,000 tons of oil.

A mill where wheat could be cleaned and made into flour.

A mill to turn grain wastes into pellets for livestock food.

A wharf that would handle simultaneously four barges and a 70,000-ton ship 900 feet long.

Continental plans to buy 40 acres next to the 102 Westwego acres it already owns, Dean said.

These projects will be financed through the New Orleans Dock Board as an agent of the state. However, neither the dock board nor the state will be liable for payments, which will be tied to revenues from the facilities whose construction will be financed by the bonds.

Continental used this method of reducing the costs of borrowing because interest paid on these industrial revenue bonds will be tax exempt, making the bonds more attractive to potential investors.

Although this part of Continental's future looks bright, the company still must face a tangle of state and federal damage suits seeking a total of more than $200 million in damages.

Primarily because of the workman's compensation claims filed in connection with the blast, Aetna Life & Casualty Co., the elevator employes' insurer, reported an after-tax loss of $7.5 million this year.

A month after the explosion, some grain exports were resumed at the elevator site, but the 27 silos that were still standing were not used. Instead, a temporary system was employed to ship corn directly from barges to freighters.

Fires in the silos burned for nearly nine months, and H. D. Vaughan, who was in charge of extinguishing them, said, "I'm fully convinced that the fire would have burned for two or three years if it had been left alone . . . You can't put it out with water . . . Water just made it flare up into a great big yellowish flame 12 to 15 feet high."

Vaughan heads the demolition company that leveled the remaining silos and finally extinguished the fires.

"The only way you can put it out is to spread it, and that's what we've been doing," he said in September as he neared completion of his work. "You pick it up with a front-end loader and spread it out. Once it spreads out into individual grains, you can put it out."

Continental had tried to raze the elevator with dynamite, but thee blasts only angered the facility's neighbors and had little effeect on the steel-ringed concrete silos.

"We went in there with a headache ball," Vaughn said. "In one day, we had 21 silos down, and in another week, we had the rest of them down."