The St. Croix refinery in the U.S. Virgin Islands, the world’s largest before being closed, is poised to see new life thanks to the U.S. shale boom.
Atlantic Basin Refining Inc. agreed to buy Hovensa LLC, the company said in a statement. Hovensa’s refinery, which was converted into an oil storage terminal in February 2012, will process about 300,000 barrels of light oil a day when it reopens.
It will take as long as two years to start the refinery, the Virgin Islands government said in a statement late yesterday. Hovensa’s return will add an oil buyer to a market where crude prices have fallen 25 percent in the past four months because of growing supply and weaker global demand. It may also bring more gasoline to the U.S. East Coast, helping to reduce fuel prices for American drivers.
“The U.S. shale revolution has created an abundant supply of U.S. light sweet crude and there is currently a limited ability to process this type of feedstock at U.S. refineries,” Mark W. Eckard, Atlantic Basin’s managing director for legal and governmental affairs, said in the statement.
Hess Corp. (HES) built the refinery in 1966 and formed a joint venture with Petroleos de Venezuela SA in 1998 to create Hovensa. Hess expanded the plant to 650,000 barrels a day in 1974, making it the largest in the world. Operators reduced capacity in the years before shuttering it as the economic slowdown that began in 2007 reduced global fuel demand.