Limetree Bay Refining files for Chapter 11

Companies linked to the 200,000 b/d St Croix refinery in the US Virgin Islands filed for Chapter 11 bankruptcy today after a long-delayed restart of the plant was waylaid by operational issues and a forced shutdown earlier this year.

Limetree Bay Refining Holdings said it has agreed on a new $25mn funding package that will provide liquidity to keep up maintenance at the shuttered refinery while it explores a possible asset sale. The group's petition in the US Bankruptcy Court for the Southern District of Texas said that services unit Limetree Bay Services will protest over $80mn in disputed debts, including a $13.4mn trade debt with an arm of BP, with which the refinery had an offtake and supply deal.

The refinery was formerly a 525,000 b/d operation owned by a joint venture between Venezuela's PdV and US independent Hess, but it withered to a 350,000 b/d rate by the time of its closure in 2012, when the firms opted to close the plant amid heavy losses.

The site reopened in January following a years-long hiatus and several delays, but was issued a shutdown order by the Environmental Protection Agency on 14 May after an accident with a coker led to an oily mist emitted from the site. The incident was one of several chemical releases cited as grounds in a lawsuit filed by St Croix residents against the refinery in May.

In late June the refinery said it was suspending the restart indefinitely.

By Dylan Chase