US oil producer Hess and Venezuela’s PDVSA, which own the closed refinery, had appointed Lazard, an investment banking firm, to explore the options of selling the facility.

Although the refinery closed in 2012, the facility continues to be used as a terminal in order to supply fuel to the island besides carrying out other operations, reports Reuters.

Without having a new agreement in place, Hovensa plans to go ahead with its previous announcement of completely closing the whole facility. This means that the sale of gasoline and diesel to the island will be stopped by February, reports Reuters.

According to Hovensa, its finances are declining and therefore, it cannot finance the operations. Also, the company’s owners to reluctant to offer any more funding.

Hovensa was also quoted by Reuters as saying that a deal would not be feasible following a rejection by the Senate.

A consortium, called Atlantic Basin Refining (ABR) formed to acquire the facility, came forward to acquire and operate it, in September. However, the legislature’s counsel raised concerns about the deal with ABR. The counsel said that the government would be left with no recourse against ABR if the contract was to breached. Even as the Virgin Islands’ attorney general supported the deal, the legislature finally rejected the agreement.

The agreement would have required ABR to reconstruct and recommence the refinery and employ local personnel and pay $1.6bn to the government during 22-year life period of the deal.

 

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