December 18, 2014 [OPIS] - Atlantic Basin Refining's (ABR) plan to purchase and reopen the shuttered 500,000-b/d Hovensa refinery on St. Croix has survived one U.S. Virgin Islands legislature committee review and will undergo another one later this week.
Early Wednesday, the Senate Finance Committee voted to approve the operating agreement reached between ABR and the administration of outgoing Governor John de Jongh. It now moves to the Rules and Judiciary Committee and could, if approved there, come before the 30th Legislature’s final session of the year scheduled for Friday.
Meanwhile, fuel supplies at Hovensa’s truck loading rack are seen running out a bit sooner than expected. Jet fuel on hand is seen lasting until about Jan. 16 and diesel until Jan. 21, company spokesman Alex Moorhead told OPIS Wednesday. Regular gasoline is seen running out Jan. 3 and premium gasoline by Jan. 7.
The company has enough operating cash to get to the end of December, he said. Customers, employees and contractors have all been notified that the St. Croix facility will close Jan. 1. If the tentative sale of the refinery falls through it will be completely shut down by March 1, according to Moorhead.
Governor de Jongh had called the Senate into special session to consider ratification of the agreement. Advocating the deal as one that will provide strong economic and employment opportunities on St. Croix, he has encountered
significant skepticism about provisions of the operating agreement. De Jongh leaves office on Jan. 5 after newly elected Kenneth Mapp is sworn in.
On Nov. 10, ABR announced it had reached an agreement in principle to purchase Hovensa LLC, inclusive of the St. Croix refinery and all related contracts and assets, from affiliates of Hess Corp. and Venezuela’s state-run PDVSA.
In order for the purchase agreement to close, the U.S. Virgin Islands legislature must approve the proposed operating agreement.
According to ABR’s website, the reconfiguration of the refinery will take about 24 months and is expected to be operational by the end of 2016. Initially, the refinery will be configured to process 300,000 b/d of crude oil.
ABR is aiming to process price-advantaged U.S. light, sweet crude, a change from the Venezuelan heavy crude that Hovensa was processing prior to its 2012 shutdown. Hovensa has a Jones Act shipping exemption, which would allow Hovensa to ship U.S. crude on cheaper foreign-flagged ships to the Caribbean from the U.S. Gulf Coast.
