Limetree Bay Terminals Pushing Storage Towards Full Storage Capacity And LPG Capability On St. Croix
Limetree Bay CEO Darius Sweet
CHRISTIANSTED — Limetree Bay Terminals (LBT) will have 20 million barrels of oil stored on St. Croix at its South Shore facility by the end of the year.
And Limetree Bay hopes to tap on-site facilities to participate in liquid petroleum gas (LPG) movements, LBT chief executive officer Darius Sweet said.
The facility at the grounds of the former HOVENSA refinery here took its first Sinopec crude cargo in early September, Sweet said.
The Chinese state-owned firm leased 10 million barrels of the initial 13 million barrels of storage area immediately available at the facility when Freepoint and ArcLight Capital took ownership of the facility in January of this year.
Limetree was working to expand that storage to more than 20 million barrels by the end of the year, although Sweet declined to set a target.
The pace of expansion would not necessarily be set by commercial contracts, he said.
About 12 million barrels of the 32 million-barrel total storage was in place when the refinery was operating and committed to crude.
Tankage would include clean products for the island’s fuel rack and adding heated storage for asphalt, heavy crude and other bitumen which can be used for paving local roads.
Limetree Bay must make at least 100,000 barrels of storage available to the Department of Public Works under the terms of the contract negotiated by Gov. Kenneth Mapp.
Limetree continued to study potential upgrades to its dock design, Sweet said. The focus was on VLCC vessels for a single point mooring system, though the depth of water available could allow larger ULCCs, Sweet said.
Other, much older equipment remained under review as well. The site once operated as the Hovensa refinery, a partnership of Hess and Venezuelan national oil firm PDVSA.
The refinery closed in 2012 as cheap natural gas and rising volumes of bottle necked U.S. crude production left the facility at a steep competitive disadvantage to nearby U.S. Gulf coast refiners.
Equipment still on site could expand the terminal’s services into LPG, Sweet said. The facility already uses propane and distillate for power generation.
Under the terms of its contract with the Virgin Islands government, Limetree must study restarting some or all of the 500,000 barrels per day refinery during the first 18 months of the terminal’s operation.
The spread between US and global crudes has narrowed since the refinery closed in 2012 as logistical improvements and an end to the ban on US crude exports erased many of the constraints that created deep discounts for US refiners.
But energy costs remain a challenge for the facility. Sweet declined to comment on any specific conditions the company would look for to encourage restarting any refining equipment.
“Clearly there needs to be a market demand for whatever configuration we would look at,” Sweet said.