By Alison Sider
The mothballed refinery on St. Croix will stay closed after the
U.S. Virgin Island's Legislature voted overwhelmingly against
letting a new owner take over the plant.
Atlantic Basin Refining Inc. hoped to revive the refinery,
saying it could run the plant efficiently on light, sweet oil
pumped in the U.S. The refinery was closed in 2012 by its current
owner, Hovensa LLC, which used it to turn heavy crude-oil from
Venezuela into gasoline, diesel and other fuels.
Atlantic Basin reached an agreement earlier this fall to buy
Hovensa, a joint venture company between Hess Corp. of New York and
Petroleos de Venezuela, the national oil company of Venezuela. But
closing the deal hinged on the island government's approval to
extend a special tax treatment for the plant. On Friday in a 13-2
vote, the U.S. Virgin Island Legislature said no to the deal.
Senators voiced worries on Friday that changing ownership might
release Hovensa from any obligations to the government and make it
harder to resolve an ongoing tax dispute with the company. They
also expressed doubts that Atlantic Basin, a newly formed company,
would be able to raise enough money to restart the refinery, which
at one time was the largest private employer on the island.
Atlantic Basin estimated it would cost roughly $1.2 billion to
revamp the plant, and said several Asian banks, private equity
groups and individual investors were interested in funding the
project.
"I cannot choose it because I do not believe it would be in the
best interest of this place," said Sen. Tregenza Roach said before
the vote.
Sen. Judi Buckley, one of two lawmakers who voted in favor of
Atlantic Basin, said the deal wasn't perfect but ultimately was in
the best interest of the island's economy.
"So far, no one has mentioned what Plan B is," she said.
"There's nothing else on the table."
Robert Moore, chief executive of Atlantic Basin, said in an
interview last week that his company would walk away from the deal
if Legislature didn't give its stamp of approval.
"If this is not ratified then Hovensa will shut their doors and
go out of business. We will leave as well," he said. "Once they
shut their doors, their refinery permits will be gone. By then it
will be too long and it will be over."
Mr. Moore didn't respond to a request for comment Friday.
Even though the St. Croix refinery hasn't produced fuel since
2012, the site has been operating as a fuel import and storage
terminal for the island. Without a sale to Atlantic Basin, the
company doesn't have enough cash to continue operating and the
terminal will be shut down, Hovensa General Manager Sloan Schoyer
told lawmakers at a hearing earlier this week.
The company informed its customers last month that it had
stopped importing fuel to the island and expects to run out of
gasoline by early January and will be out of diesel by
mid-February.
George Dudley, an attorney for Hovensa, said he couldn't comment
on the company's future.