US Virgin Islands adrift after refinery closure

The US Virgin Islands government has been trying since May to encourage new investors in the shuttered 200,000 b/d Limetree Bay refinery, "but with no luck," the territory's governor Albert Bryan said yesterday.

The territory's government "remains hopeful" about a restart of the St Croix facility that is the "economic engine" of the territory, Bryan said.

But he added: "At this point, we do not have any idea when the refinery will restart, or if it will restart."

He did not name the potential investors with which the government discussed the refinery.

The US Environmental Protection Agency (EPA) issued a 60-day shut-down order on the refinery on 14 May after an accident related to a coker released an oil mist into the community to the west of the facility.

But the operations of the refinery have been suspended indefinitely because of "severe financial constraints," the company said yesterday.

"The best case scenario for us is restructuring of refinery's debt and its reopening under new investors," Bryan said. "The worst case is that we are stuck with a shuttered facility."

The shutdown will cost the territory of 106,000 people between 500 and 600 direct and about 150 indirect jobs, Bryan said.

Limetree Bay's 34mn bl terminal that employs 85 people is not affected.

The refinery had an original design capacity of 525,000 b/d and was previously owned by Hovensa, a joint venture between Venezuelan state-owned PdV and US independent Hess.

Hess and PdV shut the facility in 2012 when it was operating at 350,000 b/d, saying it had lost $1.3bn over three years.

It was reopened in January by US private equity firm Arclight Capital Partners and US trading firm Freepoint Commodities.

Bryan said the EPA had adopted an "aggressive and troubling" position on the facility.

"We are a small place without a sitting member or two of congress and we don't have a state senator.

"A lot of times state agencies seek to bully us. So we are looking for just a fair shot at being able to reopen the facility, but to do so in a way that is safe and which protects our residents."

By Canute James