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.
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Residents in Heysham described the noise of the blast as “like a bomb going off” with debris that covered nearby streets and fields.
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Police said two people remain in hospital with injuries described as critical.
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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.
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“There is significant damage to the houses, at least two have been destroyed and a third is significantly damaged."