World News
Sinopec "Key" in Deal to Revive Bankrupt Caribbean Refinery as Storage Hub
Private equity firm ArcLight Capital and commodities trader Freepoint are set to buy the bankrupt Hovensa refinery complex in St. Croix, U.S. Virgin Islands in the Caribbean, and turn it into a "massive" oil storage hub, Reuters reports.
Key to the deal was said to be China's Sinopec agreeing to a 10-year lease of 75 percent of Hovensa's existing storage capacity of 13 million barrels, noted as being the latest in a series of moves by China as it expands storage space in the region on the back of growing volumes of Latin American crude oil it controls.
The buyers were said to be planning to invest at least $125 million to expand storage and tanker loading and unloading capacity at the site by the end of 2016, lifting total oil storage capacity to as much as 30 million barrels.
ArcLight and Freepoint said it could lift the region's available merchant oil storage space by as much as 42 percent.
As well as being a potential staging point for crude exports to Asia, Reuters suggested Hovensa is an ideal staging point to deliver fuel oil to Puerto Rico.
ArcLight Capital are understood to be the majority owner of the facility, while Freepoint will hold a 20 percent minority stake.
Hovensa, formerly owned by Hess and PDVSA, was closed in 2012 and before filing for bankruptcy.
In January 2013, Ship & Bunker reported that Hess and PDVSA were investigating the sale of their terminal network.
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