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HomeNewsArchivesCOKER ON SCHEDULE FOR FEBRUARY 2002 COMPLETION

COKER ON SCHEDULE FOR FEBRUARY 2002 COMPLETION

Nearly 11 months after securing more than a half-billion dollars to build a coker facility, HOVENSA officials on Thursday said the project is on schedule to be completed by February 2002.
Currently there are 1,500 people working on the massive $535-million project, 930 of whom are employed by Bechtel International, the project’s main contractor. Another half-dozen sub-contractors each employ 20 or more people, said Alex Moorhead, HOVENSA vice president of human resources.
Bechtel’s need for more workers, however, hasn’t been met by local residents, particularly for heavy equipment operators and mechanics, welders and ironworkers. Because of the shortfall and a need for managers to direct the project, Moorhead said 530 people have been hired from off-island.
"There are no quotas in percentages or in absolute numbers" in regard to hiring locally, Moorhead said. "But it has always been our commitment to maximize local employment."
A problem with hiring locally occurred during the first overhaul of the refinery’s fluidized catalytic cracking unit, or cat cracker, in 1996. That led to the "scandal" where a Brown and Root company was accused of overlooking locals in favor of off-island workers.
To avoid that happening again, HOVENSA, and the V.I. Departments of Labor and Education started the Crafts Training Program to prepare locals for work on the coker project. The program, fully funded by HOVENSA and managed by Bechtel, has seen 754 people enrolled, Moorhead said.
Although a number have dropped out, about 147 people have graduated in civil, electrical and millwright crafts and 252 are still enrolled. Of those, 44 people are studying for more than one craft.
Moorhead said approximately 45 of the 147 graduates are employed at the refinery.
"We expect all graduates from this training program to be hired as the coker project becomes more labor intensive within the next six months," he said.
Van Wood, HOVENSA vice president for capital projects, said two-thirds of those currently working on the project are Virgin Islands residents. They are followed by workers from Puerto Rico and then the Gulf Coast.
"All have to be U.S. citizens or green card holders," he said. "That does preclude others from places like Venezuela from working here."
Wood said the overall project – including engineering, contracting and procurement – is 60 percent complete. Actual construction, however, is just 14 percent complete, he said.
Planned into the coker project is a six-week overhaul of the cat cracker, starting in February, when the project will peak at around 2,000 workers. The turnaround will allow for modifications to the cat cracker to accommodate the addition of the coker, Wood said.
Last February, 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 and to repay existing bank debt.
Engineering for the coker and the advance purchase of equipment actually began in fall 1999. The project was to have begun early in 2000 but the company had a difficult time finding financing at acceptable interest.
The coker project will include a petroleum coke storage facility, a dock and modifications to existing processing units. The coker 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 more expensive than what competitors process.
Prior to the creation of HOVENSA, Hess Oil of the Virgin Islands Corp., or HOVIC, a subsidiary of Amerada Hess, had lost some $1.2 billion since 1991. To stem the hemorrhaging, HOVIC formed a joint venture with PDVSA in 1998 to form HOVENSA.
The joint venture allowed the new company to finance the sorely needed coker, a facility that 70 percent of U.S. refineries already have, according to HOVENSA officials.
The St. Croix refinery, the largest in the Western Hemisphere, employs approximately 950 people while its contractors employ more than 1,000. The refinery produces about 400,000 barrels of oil a day, although it has the capability to pump out 500,000 barrels a day.
Editor’s note: The original version of this story said that problems with hiring local workers occurred during the construction of the refinery’s fluidized catalytic cracking unit, or cat cracker, in the early 1990s. The complaints actually occurred during the FCC’s first overhaul in 1996 against the company conducting the hiring for that project. The Source regrets any confusion caused by the initial story.

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Nearly 11 months after securing more than a half-billion dollars to build a coker facility, HOVENSA officials on Thursday said the project is on schedule to be completed by February 2002.
Currently there are 1,500 people working on the massive $535-million project, 930 of whom are employed by Bechtel International, the project’s main contractor. Another half-dozen sub-contractors each employ 20 or more people, said Alex Moorhead, HOVENSA vice president of human resources.
Bechtel’s need for more workers, however, hasn’t been met by local residents, particularly for heavy equipment operators and mechanics, welders and ironworkers. Because of the shortfall and a need for managers to direct the project, Moorhead said 530 people have been hired from off-island.
"There are no quotas in percentages or in absolute numbers" in regard to hiring locally, Moorhead said. "But it has always been our commitment to maximize local employment."
A problem with hiring locally occurred during the first overhaul of the refinery’s fluidized catalytic cracking unit, or cat cracker, in 1996. That led to the "scandal" where a Brown and Root company was accused of overlooking locals in favor of off-island workers.
To avoid that happening again, HOVENSA, and the V.I. Departments of Labor and Education started the Crafts Training Program to prepare locals for work on the coker project. The program, fully funded by HOVENSA and managed by Bechtel, has seen 754 people enrolled, Moorhead said.
Although a number have dropped out, about 147 people have graduated in civil, electrical and millwright crafts and 252 are still enrolled. Of those, 44 people are studying for more than one craft.
Moorhead said approximately 45 of the 147 graduates are employed at the refinery.
"We expect all graduates from this training program to be hired as the coker project becomes more labor intensive within the next six months," he said.
Van Wood, HOVENSA vice president for capital projects, said two-thirds of those currently working on the project are Virgin Islands residents. They are followed by workers from Puerto Rico and then the Gulf Coast.
"All have to be U.S. citizens or green card holders," he said. "That does preclude others from places like Venezuela from working here."
Wood said the overall project – including engineering, contracting and procurement – is 60 percent complete. Actual construction, however, is just 14 percent complete, he said.
Planned into the coker project is a six-week overhaul of the cat cracker, starting in February, when the project will peak at around 2,000 workers. The turnaround will allow for modifications to the cat cracker to accommodate the addition of the coker, Wood said.
Last February, 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 and to repay existing bank debt.
Engineering for the coker and the advance purchase of equipment actually began in fall 1999. The project was to have begun early in 2000 but the company had a difficult time finding financing at acceptable interest.
The coker project will include a petroleum coke storage facility, a dock and modifications to existing processing units. The coker 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 more expensive than what competitors process.
Prior to the creation of HOVENSA, Hess Oil of the Virgin Islands Corp., or HOVIC, a subsidiary of Amerada Hess, had lost some $1.2 billion since 1991. To stem the hemorrhaging, HOVIC formed a joint venture with PDVSA in 1998 to form HOVENSA.
The joint venture allowed the new company to finance the sorely needed coker, a facility that 70 percent of U.S. refineries already have, according to HOVENSA officials.
The St. Croix refinery, the largest in the Western Hemisphere, employs approximately 950 people while its contractors employ more than 1,000. The refinery produces about 400,000 barrels of oil a day, although it has the capability to pump out 500,000 barrels a day.
Editor’s note: The original version of this story said that problems with hiring local workers occurred during the construction of the refinery’s fluidized catalytic cracking unit, or cat cracker, in the early 1990s. The complaints actually occurred during the FCC’s first overhaul in 1996 against the company conducting the hiring for that project. The Source regrets any confusion caused by the initial story.