HOUSTON (Reuters) - The owners of an idled oil refinery in the U.S. Virgin Islands that once ranked among the world’s largest have hired a former Hess Corp executive closely acquainted with the facility to oversee its return to service.
Brian Lever, who ran the former Hovensa refinery on St. Croix for Hess and partner Petroleos de Venezuela until it filed for bankruptcy in 2012, joined Limetree Bay Refining this month as president and chief operating officer, according to his LinkedIn profile and a person familiar with the matter.
Private-equity firm Arclight Capital Partners and Freepoint Commodities have pledged to invest $1.4 billion and overhaul the renamed Limetree Bay refinery to process up to 200,000 barrels of crude per day. The companies have said their goal is to begin producing low-sulfur fuels by early 2020.
Construction activity and the recruiting of experienced refinery executives already signal the restart operation is moving ahead rapidly.
In addition to hiring Lever as president, Limetree Bay is looking to fill positions including senior vice president of refining, vice president of refining operations, and heads of coker operations and maintenance, according to its website.
“Six months ago it was a ghost town, you didn’t see anything moving inside the refinery. Now, there are a lot of workers there,” said Andrew Simpson, a St. Croix resident and admiralty law attorney familiar with activity at the project.
“They’re been going (processing) line by line, getting each ready to go.”
Arclight, which owns 80 percent of Limetree Bay Holdings, parent of the refinery and a 32 million barrel marine storage terminal, did not respond to requests for comment. A Freepoint Commodities spokesman declined to comment.
Boston-based private-equity firm Arclight wants to produce fuels that meet an International Maritime Organization (IMO) emissions mandate that calls for large ocean-going vessels to switch by 2020 to fuels containing no more than 0.5 percent sulfur, down sharply from a current limit of 3.5 percent.
Lever, who left Hess in 2016 and has since worked as an industry consultant, could not be reached for comment.
The Limetree Bay refinery is the most prominent example of refiners ramping up spending to cash in on expectations of higher demand and better margins for low-sulfur fuels beginning in 2020, said Mark Broadbent, principal research analyst at consultancy Wood Mackenzie.
“The spreads they’re looking to take advantage of will be highest in early 2020 when IMO takes effect,” Broadbent said. But he warned, “Even if they start (construction) today, there’s a good chance they’ll be delayed.”
Reporting by Collin Eaton; Writing by Gary McWilliams; Editing by Tom Brown