tHE iNDUSTRY AT A GLANCE
The industrial, refining, oil, and gas industry in the U.S. Virgin Islands as with other U.S. jurisdictions is heavily regulated by the government. Having a firm grasp on jurisdictional laws, regulations, and policy make it easier for companies to traverse the industry’s myriad of challenges and complexities. In the United States Virgin Islands, Limetree Bay Terminals and Refining, located on the island of St. Croix, is a joint project venture between ArcLight and Freepoint Commodities to restart the ideled refinery. The refinery was previously owned and operated first by Hess Oil Corporation and later, HOVENSA, a joint venture between Hess Corporation and PDVSA.
refining and industrial SECTOR IN THE USVI
The St. Croix refinery is currently known as Limetree Bay Refining, however, the history of refining in the USVI spans for decades and has been one of the territory’s largest employers with thousands of workers, independent contractors, and many contracting companies working in conjunction with the terminal and refinery project and operational leadership teams. The refinery was formerly known as the HOVENSA oil refinery, operating as a joint venture between Hess Oil and Petróleos de Venezuela since 1998, and was once one of the 10 largest crude oil refineries in the world. Prior to this joint venture the refinery was owned and operated by Hess Oil Corporation. However, HOVENSA, a substantial sector of the local economy and source of petroleum products to the islands, eventually ran large losses due to market changes and shut down in 2012. These losses were a result of the refinery’s reliance on expensive fuel oil, while mainland refineries had shifted to natural gas as their primary energy source. In September 2015, HOVENSA filed for Chapter 11 bankruptcy. In early 2016, Limetree Bay Refinery was born through a joint venture between ArcLight and Freepoint Commodities, which purchased the HOVENSA energy complex. It quickly improved the existing storage infrastructure and the first customer product shipments were received in March 2016. The storage facility also expanded to employ about 650 people. Limetree Bay Refining announced in November 2018 that it was in agreement with BP’s supply and trading arm for supply, tolling, and product offtake of the refinery in late 2019. BP supplies Limetree Bay Refining with feedstocks and markets a major portion of the product offtake volumes, including low-sulfur fuels that will meet International Maritime Organization (IMO) 2020 mandates. The Limetree Bay Refinery was scheduled to reopen in late 2019 to meet the new international low-sulfur mandates that took effect in 2020. According to the project scope the restarted refinery will be able to process up to 200,000 barrels of crude oil per day, which is half of the volumes previously processed, 500,000 barrels per day.
business legal support
Our firm is adept in the industrial and refining industry. We work with the private and public sector to find solutions for legal, operational, administrative, and regulatory issues facing our clients. Businesses tend to need legal support with regulation, compliance, entity management, contracts, mergers and acquisitions, strategy and tax planning, corporate governance, employee relations, organization and operations, mergers and acquisitions, intellectual property, SEC reporting, general counsel and more. Federal and state securities laws dictate how many of these actions operate. Business law attorneys know exactly what these laws say, making it vital that a corporation has a trusted attorney to take care of matters at the state and federal level. Corporations and institutional investors also need legal support to ensure that transactions with emerging businesses and other organizations are handled correctly. A business can best protect its own interests when it has an attorney on hand to look over any contract or official negotiation with another organization.
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It’s essential that when transactional, policy, regulatory and dispute matters arise that industrial companies, government entities, associations, and support service companies working on industrial projects receive expert legal counsel from USVI Law, LLC. Let’s dive into what contracting companies need to know about navigating the industry in the USVI and how our experienced legal team can help you.
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