Limetree Bay says suspends operations indefinitely at St. Croix refinery

Limetree Bay is suspending plans to restart its 176,400 b/d refinery in St. Croix, US Virgin Islands, "due to severe financial constraints," the company said June 21.

The refinery had initially suspended operations in early May, after a series of emissions had impacted air quality on neighboring communities, drawing the attention of local authorities as well as the US Environmental Protection Agency.

"Since the temporary suspension of its petroleum refining and processing operations on May 12, 2021, Limetree Bay has been working to obtain capital to assist in its restart efforts," company said in a statement.

"Regrettably, the Company has been unable to secure the necessary funding and will be required to reduce the refinery's workforce by approximately 271 employees, effective September 19, 2021," Limetree Bay said.

No longer a powerhouse

Limetree Bay bought the former Hovensa refinery and terminal facilities, and began upgrading the plant which had been mothballed back in 2012 – due in part to poor economics.

Prior to the 2012 closure, the refinery – a joint venture between the US' Hess and Venezuelan state PDVSA – had 650,000 b/d of refining capacity – making it the largest refinery in the Western Hemisphere. It had the ability process both sweet and sour crude.

It was a main supplier of refined products to Latin America and the US Atlantic Coast, particularly high sulfur fuel oil.

In 2016, the facility was acquired by private equity firm ArcLight Capital Partners with the idea of restarting part of the refinery.

Terminal remains operational

The refinery was expected to restart in the summer 2020, but return to service was delayed by coronavirus which hampered work protocols and cut demand for refined products.

Despite the plant closure, the storage terminal at the facility will continue to operate as normal. The facility, located on the well-traveled Caribbean trade route, has been operating since ArcLight's purchase.

The Limetree Bay Terminal has blending facilities as well as storage for crude oil, fuel oil, bunker fuel, gasoline, diesel, jet and petroleum gases. There are 167 tanks with 34 million barrels of storage and 11 docks.

In May 2020, the terminal brought online its Single Point Mooring Buoy, allowing access to the very large crude carriers, loading several million barrels after opening.

While refined products were exported from St. Croix, some were exported from storage, with June exports of refined products averaging 19,000 b/d, down from the 24,000 b/d for May, according to data from Kpler, the commodity tracker.

Most went to other Caribbean destinations such as the islands Guadalupe, Barbados and Puerto Rico, as well as some exports to terminals in Long Island, New York, and New Jersey. Expectations are that exports from US Gulf Coast will fill any supply gaps.

Including exports of crude stored at the terminal, June exports averaged 145,000 b/d, compared with the 177,000 b/d in May, Kpler data showed.

With suspension of refinery operations, the facility will be competing with other Caribbean storage terminals, including Prostar's St. Eustatius facility, which has 14 million barrels of storage capacity. The region is used by trading houses, like Trafigura, as a storage point for refined products and crude oil.