The Hovensa refinery has completed the shutdown of its 350,000 barrel per day refinery on St. Croix, the company announced Tuesday. Hovensa employees will continue working through a transition period. Thereafter, approximately 100 people will remain to work at the oil storage terminal.
“I’m extremely proud of the professionalism demonstrated by our refinery team in the safe and successful shutdown of refinery operations,” said Brian Lever, president and chief operating officer of Hovensa, in a prepared statement from the company.
“We completed the shutdown with zero injuries and zero environmental incidents,” Lever said.
On Jan. 18, Hovensa announced the refinery would be shut down and that the complex would be operated as an oil storage terminal going forward; however, Hovensa’s operation as an oil storage terminal is subject to negotiations with the V.I. government.
Losses at the Hovensa refinery totaled $1.3 billion in the past three years and were projected to continue. The losses were caused primarily by weakness in demand for refined petroleum products due to the global economic slowdown and the addition of new refining capacity in emerging markets.
In the past three years, these factors have caused the closure of approximately 18 refineries in the United States and Europe with capacity totaling more than 2 million barrels of oil per day.
Dropping natural gas prices combined with increasing crude oil prices put the oil-fueled refinery at a competitive disadvantage to stateside refineries with easy access to natural gas and other cheap energy sources.
Hovensa also announced it has sold $355,453,000 of its $355,683,000 in outstanding bonds, leaving $230,000 in tax exempt bonds outstanding that are not held by Hovensa. Holders of tax-exempt bonds accepted for purchase will receive the purchase price of $1,000 per $1,000 in aggregate principal amount of Tax-Exempt Bonds, plus an amount equal to accrued but unpaid interest up to, but not including, the settlement date. The bonds were debt the refinery incurred as part of improvements to the plant, such as building its delayed coker facilities.