US Virgin Islands sell shuttered oil refinery

The US Virgin Islands have announced an US$800 million deal to sell what was once one of the world's largest oil refineries to Boston based equity firm, ArcLight Capital Partners' Limetree Bay Holdings. The government said it would receive a US$220 million initial payment as part of an ongoing 25 year deal that is estimated to create hundreds of jobs. Governor Kenneth Mapp said the government had reached a settlement with HOVENSA, agreeing that the HOVENSA oil storage facility in St. Croix would be expanded and a US$6 million asphalt plant would be built.

Mapp said, “These dollars will help balance the budget while we rebuild our economy.” After the deal has been finalised, the government should no longer have to borrow money, at least for about three years, because it would be receiving funding of a minimum of US$7 million/y from Limetree.

The original refining facility closed in early 2012 after many years of weak demand and high operating costs, the repercussions of the closure meant an economic blow to the US territory.

He said the deal as it stands would require that 80% of all workers are Virgin Islanders. The agreement also allows US$30 million to continue the cleanup of the site and awards the government 330 acres, or 134 hectares, of HOVENSA land to build 130 work force homes and a vocational school.

The local government had previously filed a lawsuit against the US oil company Hess Corp. in September for more than US$1 million, accusing the firm of abandoning the facility it had vowed to run through 2022. The subsidiary of Hess corp. that owns the refinery was later forced to announce that it would file for chapter 11 bankruptcy, which would allow it to sell the refinery as a storage facility, a result many were unhappy with and a move the government tried to prevent.

Sources: Voice of America, Yahoo News, Energy Guardian

Edited from various sources byFrancesca Brindle

Read the article online at: https://www.hydrocarbonengineering.com/refining/04122015/usvi-sell-closed-oil-refinery-1893/