HOUSTON: The owners of a long-closed oil refinery on St. Croix will disclose on Monday an agreement with the Caribbean island’s governor to restart the plant and begin producing fuels late next year, according to people familiar with the talks.
The refinery would process up to 150,000 barrels per day (bpd) and supply low-sulphur fuels required by an International Maritime Organization mandate that begins in 2020, according to a US Environmental Protection Agency review of the project.
The Caribbean is facing declining fuel supplies from Venezuela, which has sharply cut its shipments to the region.
Kenneth Mapp, the governor of the US Virgin Islands, has scheduled a press conference for Monday morning to detail the deal with ArcLight Capital Partners and Limetree Bay Terminals LLC, which own the refinery, spokeswoman Lisa Posey said on Sunday. Any restart requires approval by the governor and legislature of the US Virgin Islands.
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 people said. That deal soured over two years ago.
BP spokesman Mike Abendhoff declined to comment.
The refinery could begin production as early as next year, said US Virgin Islands Senator Nereida Rivera-O’Reilly, who called the prospect “welcome news” for an island still recovering from two hurricanes last year.
The regulation will mean about 3 million bpd of high-sulphur fuel oil will be displaced by low sulfur products, estimates Rob Thummel, a portfolio manager at investment group Tortoise.