(article excerpted from VI Consortium, Nov. 16, 2018)
It’s official! Limetree Bay Refining, LLC, and British Petroleum, the multinational oil and gas company headquartered in London, have reached a definitive agreement to restart oil refining at the former Hovensa plant.
Limetree Bay Refining anticipates completion of the restart by late 2019.
“This agreement marks a significant milestone for the refinery restart effort,” said Governor Kenneth Mapp. “To date, the project has brought 1100 construction jobs to the territory. With more than US$1.5 billion of total capital investment in the project, we can look forward to a period of significant growth in employment and the economy. This is a great day for the U.S. Virgin Islands. I thank the representatives of Limetree Bay Refining for their commitment to our territory and look forward to a long and mutually beneficial relationship.”
The oil refining restart is expected to bring an addition of 700 permanent jobs to the already 750 employees currently working at Limetree Bay. Under the new agreement, 200,000 barrels of crude oil will be produced daily, a number that pales in comparison to HOVENSA’s heyday output of 700,000 barrels per day, but one that is significant nonetheless.
While the St. Croix economy stands to benefit the most from the restart, the governor said oil refining will fuel growth territory-wide. To back this up, Mr. Mapp in July announced a 110-room “upscale lifestyle” hotel branded as either Hilton, Hyatt or Intercontinental to be constructed on St. Thomas. Additionally, he said, the Government Employees’ Retirement System (G.E.R.S.) will receive a direct flow of funding from the agreement to help it remain solvent for at least the next five years.
The deal is also expected to clear the release of $70 million for the government, which will be dedicated to the following projects:
AMOUNT Dedicated to:
$25 million – GERS Solvency (distributed by the Public Finance Authority)
$10 million – Investment/Partnership for New,Upscale Hotel at Yacht Haven Grande
$10 million – Income Tax Refunds
$3 million – Judicial Branch Operations for Upcoming Fiscal Year
$2 million – Relocation/Development of Legislative Complex on St. Croix
$7 million – Payment for Outstanding Obligations to Waste Management Authority Vendors
$3 million – St. Croix Capital Improvement Fund
$4 million – Paul E. Joseph Stadium
$6 million – Construction of a Bitumen Storage Tank (outlined in original Limetree Bay operating agreement)
$2 million – St. John Capital Improvement Fund
$1 million – Reconstruction of the St. John Battery Destroyed during Hurricane Irma
The announcement from BP and Limetree Bay Refining comes at a critical moment for Governor Kenneth Mapp, who is currently in the battle of his political life, as he attempts to fend off the Bryan-Roach campaign, which has been on the receiving end of a number of endorsements after coming out ahead of Mr. Mapp during the General Election, but not collecting enough votes — 50 plus 1 percent — needed to clinch victory. We will head to the polls on Nov. 20 to elect Mapp or Bryan to lead the U.S. Virgin Islands for the next four years.