Atlantic Basin Refining to buy idled Virgin Islands refinery

HOUSTON (ICIS)–US Hess and Venezuela’s PDVSA have reached a tentative agreement to sell the idled St Croix refinery to Atlantic Basin Refining with requirements to rebuild and restart, the US Virgin Islands’ governor said on Tuesday.

Atlantic Basin, which was formed to acquire the refinery, is required to rebuild and restart the refinery, employ hundreds of Virgin Islanders and make substantial payments to the government totalling more than $1.6bn in fixed payments over the life of the agreement. 

Furthermore, the agreement states that the company will be responsible to take down the facility and clean up the site if it does not restart the refinery or if it is shut down again.

“This will ensure that, whatever the circumstances, if there is not to be an operating refinery, we will not be left with an eyesore and a wasting asset,” said Governor John P de Jongh Jr.

Atlantic is also required to retain an engineering firm to develop rehabilitation plans, which is expected to take nine to 12 months. Actual reconstruction of the refinery is expected to take as long as two years and to cost more than $1bn. 

The operational agreement would be for 22 years, renewable for two additional 10-year terms.

Prior to its shut down in 2012 due to poor refining economics, the refinery supplied products to the US east coast.

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