St. Croix refinery owner must negotiate new consent decree with U.S.
West Indies Petroleum will need to negotiate a new consent decree with the U.S. Department of Justice (DOJ) if it wants to own and operate a St. Croix refinery with a history of environmental problems, the DOJ said on Friday.
The Limetree Bay refinery was sold in December 2021 for $62 MM to West Indies Petroleum, a Jamaican oil storage company that intends to operate the facility. Private equity investors had poured had $4.1 B into reviving the aging U.S. Virgin Islands facility, which was shut down by U.S. environmental regulators after a botched restart last year.
An earlier owner, Hovensa, was required to spend $700 MM on pollution control equipment, among other obligations after violating the Clean Air Act by increasing emissions without first obtaining pre-construction permits and installing required pollution control equipment.
Hovensa went bankrupt and shut down the plant the following year; later Limetree Bay Ventures bought the refinery in December 2015.
West Indies Petroleum will need to be party to the consent decree the U.S. reached with Hovensa as well as negotiate a new consent decree with Limetree Bay and the DOJ stemming from more recent operational issues, the DOJ said in an email dated March 2.
The company will also need to install and operate a flare gas recovery system, which the EPA identified as one of the causes of the refinery's excess hydrogen sulfide and sulfur dioxide emissions last year.
The refinery also exceeded allowed levels of benzene monitored at the fenceline of the facility when it operated in the first half of 2021, according to an EPA email.
The EPA said a new owner seeking to operate the plant would need to conduct further analysis to identify the root causes of the benzene exceedances and implement corrective actions.
(Reporting by Laura Sanicola; Editing by Sandra Maler)
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