US Hess to permanently close HOVENSA joint venture refinery

18 January 2012 14:39  [Source: ICIS news]

HOUSTON (ICIS)--US energy firm Hess and partner Petroleos de Venezuela plan to permanently close their joint-venture refinery in the US Virgin Islands amid difficult market conditions, Hess said on Wednesday.

Hess said following the closure, HOVENSA would operate as an oil storage terminal.

HOVENSA had explored all available options to keep the refinery operating but severe financial losses left it with no other choice, Hess said.

Only a year ago, in January 2011, HOVENSA announced plans to reconfigure the refinery and cut capacity by 30% to 350,000 bbl/day to improve its competitiveness.

HOVENSA’s losses were the result of weak demand for refined petroleum products due to the global economic slowdown and the addition of new refining capacity in emerging markets, Hess said. 

“In the past three years, these factors have caused the closure of approximately 18 refineries in the US and Europe with capacity totaling more than 2m bbl/day,” the company said.

In addition, the low price of natural gas in the US put HOVENSA, an oil-fueled refinery, at a competitive disadvantage, Hess added.

By: Stefan Baumgarten
+1 713 525 2653

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