A private equity firm and a commodities trader are planning to buy the shuttered Hovensa refinery in St. Croix and convert it to a major oil storage hub, Reuters reports. Boston-based ArcLight Capital and Stamford, Connecticut-based Freepoint plan to invest $125 million to expand the refinery’s existing 13 million barrels of crude and oil products storage capacity to as much as 30 million by the end of 2016. The two firms also struck a 10-year lease agreement with Chinese oil refiner Sinopec, which will use 75% of the facility’s capacity.
The refinery, which was previously owned by Hess Corp. and PDVSA, was idled in 2012 and used primarily as an oil terminal up until this year. ArcLight will be the majority owner of the facility.
U.S. Virgin Islands lawmakers blocked a deal to sell the refinery late last year. The refinery filed for bankruptcy in September 2015.
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