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Charlotte Amalie
Thursday, March 28, 2024
HomeNewsArchivesHovensa Confirms Agreement with V.I. Government

Hovensa Confirms Agreement with V.I. Government

Hovensa confirmed Tuesday that in early April it reached agreement with the Government of the Virgin Islands on a plan that will govern a 14-month sale process of the company’s facilities on St. Croix, an agreement announced April 6 by the government.

In a one-paragraph news release issued Tuesday, Hovensa spokesman Alex Moorhead said the proposed Fourth Amended Agreement is being reviewed by Hovensa’s owners before being signed and submitted to Gov. John deJongh Jr.

The April 6 announcement issued by Government House said the agreement must be ratified by the Senate before it takes effect and that the clock for the potential sale of the facilities begins at that moment.

DeJongh called the agreement "a significant step forward towards our goal of seeing if we can find a new owner who will re-open the refinery."

Details of the agreement will not be released until it is submitted to the Senate for ratification, but the government released an outline of the key terms, which include:
– The sales process will not exceed 14 months from the date ratified by the Senate;
– Hovensa will make available storage for fuels sufficient to meet the needs of St. Croix through August 2019, or so long as Hovensa is operating an oil storage terminal;
– Hovensa will make fuels available to the government and the public at its truck rack through March 2014, after which date Hovensa will assist the government in securing responsible third-party suppliers and operators;
– Hovensa will invest a minimum of $500,000 annually in career technical and scholarship programs for so long as the terminal is owned by the company;
– and Hovensa will provide the University of the Virgin Islands with access to the Hovensa Training School.

For its part the government has agreed:
– To suspend Hovensa’s obligation to bid on the WAPA fuel supply;
– To reduce Hovensa’s obligations for payment in lieu of property taxes to $7 million annually commencing Oct. 1 for as long as Hovensa is operating an oil storage terminal, but not later than September 2019, after which it will return to $14 million annually.

If the refinery is not sold or if Hovensa ceases to operate an oil storage terminal or on before August 2019, whichever is earlier, Hovensa will make to the government a lump sum payment of such amount as is necessary for the government to recoup all payments foregone.

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