HOVENSA has finally found financing to start its long-awaited coker construction project, the company announced Friday. The coker will make the St. Croix refinery competitive with refineries with similar capabilities.
HOVENSA, equally owned through a joint venture by Amerada Hess Corp. and Petroleos de Venezuela, reached agreement for $600 million in financing underwritten by Bank of America for the construction of a 58,000-barrel-per-day delayed coking unit and related facilities at its St. Croix refinery and to repay existing bank debt, company officials said.
The financing includes a $450 million term loan facility and a $150 million reducing revolving credit facility.
Engineering for the coker and the advance purchase of equipment with long delivery time have continued since the fall. The project was to have begun early in 2000 but the company had a difficult time finding financing at acceptable interest.
The construction of the coker is now expected to begin in the spring, with the target date for completion the second quarter of 2002. Bechtel corporation will be the primary contractor under a fixed-price turnkey contract.
About 200 workers will be employed initially to prepare the site. Manpower needs will increase over a 10-month period and peak at about 2,000 workers.
The coker project will include a petroleum coke storage facility, a dock and modifications to existing processing units. It will enable the refinery to process heavier Venezuelan crude oil, for which HOVENSA has a long-term supply contract with PDVSA. Without the coker, HOVENSA is forced to process crude oil that is $2 to $4 per barrel more expensive than what competitors process.
The St. Croix refinery, the largest in the Western Hemisphere, employs between 850 and 2000 people and produces about 400,000 barrels of oil a day, although it has the capability to pump out 500,000 barrels a day.
