Lancashire Fire said in a tweet units were called to a row of terraced houses on Mallowdale Avenue in the early hours of Sunday and that firefighters are searching a collapsed property.
Residents in Heysham described the noise of the blast as “like a bomb going off” with debris that covered nearby streets and fields.
Police said two people remain in hospital with injuries described as critical.
Speaking to reporters at the scene, Joe Edwards, Assistant Chief Constable of Lancashire Police, said: “Shortly after 2.40am this morning emergency services were called to residential properties following reports of a large explosion at the address.
“There is significant damage to the houses, at least two have been destroyed and a third is significantly damaged."