February 1, 2022
West Indies Petroleum Limited won the auction for the Limetree Bay Refinery in St Croix with a bid worth US$62 Million.
West Indies Petroleum bested St Croix Energy, which had bid US$57 million for the asset and would have been selected if West Indies Petroleum had failed to make their first payment. Limetree Bay Refinery is located on the south shore of St Croix and is one of the largest refineries in the Western Hemisphere, capable of producing over 350,000 barrels of refined oil per day and has storage for up to 25 million barrels of oil at peak levels. After shutting down in 2012 and declaring bankruptcy in 2015, St Croix’s Limetree Bay refinery restarted operations under new ownership in February 2021. But within days, the refinery began experiencing what became a series of high-profile accidents that enraged nearby residents, raining oil down on homes, contaminating drinking water and releasing hazardous fumes so pungent that officials shut down schools and offices for days, according to a report by Washington Post.
The issues caused the refinery to be shut down in May 2021 after investigations by the US Environmental Protection Agency (EPA). During a recent bankruptcy hearing, a restructuring expert testified that it would cost between $100 million and $150 million to ensure the refinery could be permitted by the EPA.
The original auction for the refinery took place in the US Bankruptcy Court for the Southern District of Texas late in November 2021. Previously, competing bidder St Croix Energy won a first round in bidding for the refinery. However, Limetree Bay Refinery through its lawyers filed to reopen the auction, stating that another bidder, WIP, was involved. They said WIP’s chief executive officer had fallen ill and needed emergency medical attention in the days before the auction. In the end, WIP Limited offered US$62 million cash up front, which was superior to St Croix Energy’s US$57 million. WIP Limited reports that at in its current state, the refinery has an operational capacity of around 220,000 barrels per day of refined oil and the Company has plans of increasing the capacity to around 450,000 barrels per day. For comparison, Jamaica’s refinery, Petrojam, can produce 30,000 barrels of refined oil per day.
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