The Senate will have to weigh the benefits of Limetree Bay’s deal and decide whether the auction winner brought in the best bid.

A special session at the Senate was called by Gov. Kenneth Map on Dec. 17 to discuss the Hovensa sale deal, but no decision or vote was made.

Hovensa could become a key terminal for clean products storage and break-bulk and build-bulk purposes in the Caribbean. Hovensa has the potential to be a “choice terminal” in the Caribbean, when compared with BORCO and Statia, for clean oil products due to its location relative to South America, in-line/closed loop blending capabilities and ship berths that are protected from weather, terminaling sources told OPIS earlier this year.

Hovensa was a refinery, and it boasted efficient logistics for crude and oil products storage as well as marine loading and unloading facilities.

Following the U.S. crude export liberalization, Hovensa could also be used for storing U.S crude if the economics work.

Also, the terminal asset at St. Croix offers room for potential storage expansion as well, depending on capitalization of the new owner.

OPIS notes that the controversy surrounding the Hovensa asset sales during its bankruptcy proceedings could result in a long-drawn-out hearing at the Senate and/or courts.

Limetree Bay was the stalking horse bidder, beating out other interested parties in the auction, including Buckeye and about three metal-scrapping companies.

Buckeye’s bid for Hovensa terminal assets was $345 million, industry sources said. Although Buckeye’s bid was higher than Limetree’s, Buckeye’s bid does not include liabilities.

Also, Limetree’s bid was selected and backed by the Virgin Islands governor’s office, pushing it ahead of Buckeye, they said.

The governor’s office believed that Limetree’s bid was the highest and best bid, meeting both requirements for the Hovensa auction process. This is even though Buckeye had the highest bid, but not the best bid in the eyes of the governor’s office.

The governor’s office was also impressed with ArcLight’s potential to raise terminal utilization in the future as well as establish a possible path to restart the 500,000-b/d refinery down the road, sources said.

The governor’s office also believed that Limetree understood the environmental liabilities linked to Hovensa, and Limetree would be in the best position to remediate any environmental issues.

Buckeye’s bid was deemed second-best to Limetree’s, partly due to a walk-away clause in Buckeye’s bid. Buckeye would drop the Hovensa bid if it cannot get an approval for the deal from the Federal Trade Commission.

The controversy surrounding the Hovensa assets could result in a long-drawn-out hearing at the Senate and/or the courts.

Limetree Bay and Buckeye were interested only in the 32-million-bbl-capacity terminal at Hovensa, and traders had told OPIS previously that the St. Croix terminal has an operational capacity of about 15 million to 16 million bbl. The remaining 50% of the capacity was unused and mothballed.

OPIS reported in September that the earliest date that the Hovensa oil terminal could return to operational status would be at the end of 2016 if everything goes well. That terminal has been shut since February 2015 after a failed asset sale process.

Hovensa restart could face delays at the Senate and/or courts. Also, it will take several months to prep the terminal for operational restart.