April 15, 2005 – Senate President Lorraine L. Berry led members of the 26th Legislature on a tour of the Hovensa refinery Friday.
Hovensa officials presented information on topics as varied as the company's values and mission, market conditions, and political demands.
Company officials stated that Hovensa intends to contribute more in the local tax base as well as expand its productive capacity by investing over $300 million dollars in capital investments. Planned improvements include a new wastewater treatment unit, a turbine generator, a quality control laboratory, and additional gasoline production facilities. These new construction projects mean more temporary jobs in the immediate future and well as more full-time employment.
Senators and staff inquired about the high gasoline prices within the territory, especially on St. Thomas and St. John.
According to a press release from the senate, company officials said Hovensa sells gasoline and diesel to wholesalers below the "rack" rate and that the problem is tied to the gasoline distribution sector not the refinery end of the cycle.
The spill over effect of high prices on utilities was also brought up and the high prices that WAPA charges were discussed in detail. Hovensa officials indicated that WAPA receives fuel below market price valued at $25 million annually, a significant savings to the Authority.
The problem of high-energy costs is tied to internal WAPA operations. A discussion emerged about the price of the proposed wastewater treatment plant that Hovensa presented and a possible comparison to the current proposal by the Waste Management Authority.
Berry asked Moorhead about possible ways to reduce cost of gasoline on the islands of St. Thomas and St. John. Hovensa officials, according to the press release, are committed to offering technical assistance to the Government in developing a fuel storage terminal facility on the island of St. Thomas.
This facility would afford the St. Thomas and St. John districts the ability to receive fuel transported from Hovensa, which could help create a competitive marketplace with lower fuel prices in the St. Thomas and St. John Districts. Alex Moorhead, Hovensa's vice president, said the company has no interest in getting into the retailing business, but it is willing to sit down and perhaps look at some options towards assisting legislators in resolving consumer issues in the territory. Hovensa would play an advisory role.
The tour included views of the catalytic cracking plant, and the layout of the production facilities. Also shown were various areas of potential growth at the refinery.
Larry Kupfer, Hovensa's chief operating officer, concluded that face-to-face communication is very meaningful for a productive relationship between Hovensa and the government of the Virgin Islands.
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