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Idled St Croix refinery to restart, produce fuels by 2020

October 09/2018

MOSCOW (MRC) -- Owners of an idled oil refinery in St. Croix, U.S. Virgin Islands, which was once one of the world's largest refineries, plan to invest USD1.4 billion to refurbish and restart a portion of the plant, reported Reuters with reference to their statement.

ArcLight Capital Partners, a private equity firm that owns 80 percent of Limetree Bay Terminals LLC, expects the former Hovensa plant to be able to process 200,000 barrels per day of crude and deliver fuels to market by January 2020, officials told a news conference in St. Croix.

The Boston-based company spent two years studying the market and developed "a refinery profile we see thriving in the current marketplace," said John Erhard, an ArcLight partner.

The refinery would supply low-sulfur fuels under an International Maritime Organization mandate that begins in 2020. The Caribbean is facing declining fuel supplies from Venezuela, which has sharply cut its shipments to the region.

In the 1970s, the refinery on St. Croix was able to process 650,000 bpd. It halted processing in 2012, filed for bankruptcy three years later and was sold to ArcLight and trading firm Freepoint Commodities.

The two companies run Limetree Bay Terminals, a 25 million barrel oil storage and marine terminal on the site.

As part of its agreement with the USVI government, Limetree has purchased 225 acres of land and more than 100 homes surrounding the refinery to facilitate the restart, US Virgin Islands Governor Kenneth Mapp said in an interview.

"They've already begun spending money," Mapp said. "Assets and resources are already on their way."

Reopening the refinery will be a boon to the US Virgin Islands, which has struggled economically since Hovensa closed in 2012.

The government will collect USD600 million in revenue from the refinery over its first 10 years in operation, Mapp said.

Officials did not discuss BP Plc's potential involvement in the refinery restart, but two sources familiar with the matter said the British oil company is in negotiations to supply crude to the plant.

The deal under discussion would be similar to a supply and marketing arrangement BP struck with NARL Refining for the 115,000-bpd Come by Chance refinery in Newfoundland, one of the sources said. That deal soured over two years ago.

ArcLight and Freepoint officials were unavailable for comment. BP spokesman Mike Abendhoff declined to comment on its potential role.

As MRC wrote before, in late September 2018, BP Plc shut the large crude distillation unit (CDU) at its 413,500 barrel per day (bpd) Whiting, Indiana, refinery to begin an overhaul. BP plans to keep the 240,000 bpd Pipestill 12 CDU shut through late October for the planned overhaul.


mrcplast.com
Author:Margaret Volkova
Tags:crude and gaz condensate, BP Plc, USA.
Category:General News
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