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12 Suppliers Bid to Supply WAPA Fuel Oil

A dozen oil suppliers have responded to the V.I. Water and Power Authority’s most recent invitation for bids to supply No. 2 fuel oil for power production in both districts, the utility announced Monday.

The response was substantially greater this time around than when WAPA first issued the bids invitation in March, which netted only a single response in April.

The utility was forced to seek a new fuel supplier after the current provider, Hovensa, announced in January it would cease refinery operations on St. Croix and would no longer supply fuel oil to the utility after June 30. Hovensa later offered an alternate option to deliver fuel oil at discounted rates until the end of the year.

When WAPA issued the first request, it was in the process of preparing its annual invitation to bid for fuel oil to which Hovensa traditionally has been the most responsive bidder.

Only one company, New York-based Atlantic Petroleum Trading Ltd., responded to the original request for bids by the April 10 deadline. WAPA Executive Director Hugo Hodge later said the authority had looked into the bidding process and concluded bidders were discouraged by the likelihood of competing with Hovensa’s discounted fuel rates.

The utility will seek delivery of as much as 80,000 barrels per shipment based on generation needs in the two power plants. Delivery will begin no later than Dec. 1. The agreement will be for one year and can be automatically renewed by the parties for another nine months.

In a WAPA statement, Hodge said the utility’s management team and technical and legal consultants have begun evaluating the bid proposals and will start interviewing companies next week to determine a short list of potential suppliers. Companies positioned on the short list will then be scheduled for negotiations.

Hodge said that WAPA expects to complete negotiations and make a final decision for a fuel oil supplier by the beginning of October.

Bid responses were received from the following 12 companies:
– Vitol Inc., Houston, Texas;
– Novum Energy Trading Corp., Tortola, BVI;
– Chevron Products Company, Houston;
– Shell Western Supply & Trading Ltd., Bridgetown, Barbados;
– Raindrop Petroleum, New York, N.Y.;
– Cardinal Connor Associates, St. Croix;
– Caribbean Logistics, St. Thomas;
– Trafigura AG, Bayamon, Puerto Rico;
– Peerless Oil & Chemicals Inc., Penuelas, Puerto Rico;
– IS International Services LLC, Lawrenceville, Ga;
– Hovensa LLC., St. Croix;
– and L’Oil Inc., Nashville, Tenn.

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