Limetree Bay Ventures has secured $1.25bn in financing to restart its idled refinery located in St. Croix in the US Virgin Islands.
Image: Limetree Bay Refining plans to restart the St. Croix refinery, a former HOVENSA petroleum refinery. Photo: courtesy of Cumulus Clouds/Wikipedia.org.
Last month, Limetree Bay signed an agreement with BP Products North America, the supply and trading arm of oil and gas major BP, regarding tolling, supply and offtake of the refinery once it restarts operations.
The stakeholders of Limetree Bay are affiliates of ArcLight Capital Partners, Freepoint Commodities, and an undisclosed sovereign wealth fund.
The refinery to be restarted was a former Hovensa oil terminal, which has a peak processing capacity of 650,000 barrels per day. Along with its associated terminal assets, the idled refinery was acquired out of bankruptcy by Limetree Bay in 2016.
Limetree Bay Refining president Brian Lever said: “The closing of the financing provides the resources necessary to complete the refinery restart.
“We have 1,300 workers currently involved in the project and expect a significant ramp in activity over the coming months as we prepare for restart by the end of next year.”
Limetree Bay revealed that the financing is made up of $550m of preferred equity and a $700m in the form of a term loan.
EIG Global Energy Partners led the preferred equity through funds and accounts managed by it and was joined by other investors such as funds affiliated with BlackRock and Barclays.
On the other hand, the term loan for the refinery was led by Westbourne Capital. ArcLight, in conjunction with the financing for the refinery, is also said to have made an additional common equity commitment to Limetree Bay.
ArcLight managing partner and founder Daniel Revers said: “The Limetree Bay transaction harnesses ArcLight’s deep energy expertise. In particular, ArcLight’s current and former ownership of over 100 million barrels of storage capacity has already helped Limetree Bay develop a robust terminal business.
“We also have a strong history of successfully completing large-scale capital projects. This complex transaction makes full use of ArcLight’s suite of specialized capabilities including financial structuring, construction management, implementation of operational best practices, commodity management, human resources, and environmental management.”
The refinery project, which had already created 1,100 construction jobs as per US Virgin Islands Governor Kenneth Mapp, is expected to create more than 700 permanent jobs after its restart.