US Virgin Islands refiner Limetree Bay Energy has announced that it has suspended plans to restart its 200,000 bpd St Croix refinery indefinitely, following a temporary suspension of operations in May 2021.
A flare incident on 12 May 2021 caused a release of oil droplets which spread to the surrounding area, affecting local residents and water supplies, as well as resulting in a number of odour complaints. Internal investigations revealed that the incident was caused by ‘an upset’ at the coker unit. Limetree has since been trying to obtain capital to restart the refinery, but has been unsuccessful. From 19 September 2021, 271 employees will lose their jobs as a result.
The associated storage terminal will be unaffected by the shutdown. The company will now prepare the refinery for an extended shutdown, including purging gases from all lines and removing residual oil.
‘This was an extremely difficult decision for us, and we are truly saddened to announce suspension of our restart plans for the refinery. Our personnel have demonstrated tremendous commitment and dedication in restarting the refinery, and we continue to be proud of their hard work. Unfortunately, this is our only option, given the extreme financial constraints facing the company,’ says Jeff Rinker, Limetree Bay’s CEO.
The refinery has only been operational since February 2021, after multiple delays. Limetree Bay bought the complex out of bankruptcy in 2016. The restart was planned for late 2019, after Limetree Bay Ventures reached a tolling, supply and offtake deal with BP. The date was pushed back to 2020 with plans to produce IMO2020-compliant marine fuel. However, an outbreak of COVID-19 delayed the restart again.
US Virgin Islands Governor Albert Bryan Jr. says that he remains hopeful for a ‘quick resolution’ to the restart of the refinery, for the sake of the workers and vendors who benefit directly and indirectly.
‘This announcement is not something our administration wanted or hoped for, but it is certainly something for which we are prepared. Our Department of Labor has already activated its rapid response teams to help affected workers transition to new employment and or connect them with unemployment benefits,’ he says in a statement. ‘We always knew the refinery could not continue to be the sole lynchpin of our private sector industry and are continuing the work to diversify our private sector through investments in the marine industry, a 20-year economic development strategic plan, and the establishment of a catalyst fund to support small businesses through loans, grants, and credit-backing.”