ArcLight Capital Partners LLC and Freepoint Commodities LLC have announced that Limetree Bay Terminals (LB Terminals) has completed the purchase from HOVENSA LLC, also known as St. Croix Refinery. The purchase includes the idled storage terminals, refining units, and marine infrastructure located at Limetree Bay, St. Croix, US Virgin Islands.
ArcLight, through an affiliate, manages and owns an 80% interest in LB Terminals while Freepoint owns the 20% remaining.
The St. Croix Facility consists of approximately 32 million barrels of crude oil and petroleum product storage, idled refinery units with total peak processing capacity of 650 thousand barrels per day, a deepwater port with 9 ship docks, 6 tug boats, and various associated equipment and inventory.
LB Terminals intends to make significant investments to revitalize the St. Croix Facility as an environmentally-compliant, multi-purpose energy center, with an initial focus on crude oil and refined petroleum product storage operations.
LB Terminals has already executed a 10-year lease agreement for 10 million barrels of storage capacity with China Petroleum & Chemical Corporation (Sinopec) as well as lease agreements with Freepoint covering an additional 3 million barrels of capacity.
Dan Revers, Managing Partner and co-Founder of ArcLight, said:
"Closing on the St. Croix Facility represents the culmination of an innovative and complex transaction executed by ArcLight in conjunction with its partner Freepoint. ArcLight was attracted by the St. Croix Facility's strategic location at the crossroads of the movement of crude and refined products, the scale and quality of its infrastructure, and its highly skilled workforce. Together with our partners, we have developed a detailed strategy to repurpose the St. Croix Facility as a world-class storage and logistical hub. ArcLight intends to leverage its deep experience and expertise in the terminal segment, including through our recent acquisition of Gulf Oil, to drive value creation for all of the Facility's stakeholders."
Jake Erhard, Partner at ArcLight, added:
"The successful closing of this transaction could not have been possible without the concerted efforts of many Virgin Islanders. I especially want to thank Governor Mapp and his advisory team for their creativity and perseverance in working with ArcLight to structure an innovative operating agreement. I also want to thank the Senators of the 31stLegislature, led by Senate President James, for their diligence in considering and ultimately approving the agreement. We look forward to getting the St. Croix Facility back in business and driving jobs, taxes, and economic activity for the people and Government of the Virgin Islands."
Freepoint's CEO David Messer stated:
"Freepoint is proud to be participating alongside ArcLight as the St. Croix Facility is transformed into a vital link at the crossroads of global energy markets. Together with our partner Sinopec, we are excited by the opportunities to help revitalize the St. Croix economy, stimulate regional economic activity, and enhance overall market efficiency."