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Monday, August 8, 2022
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Hovensa Preparing to Close Fuel Rack

A letter from the manager of Hovensa’s St. Croix fuel rack on Monday repeated the company’s warning that it is preparing to shut down the facility.

The letter from Richard Layton, manager of the facility, to truck rack customers and haulers cited Hovensa’s "deteriorating financial condition" for the move.

"As you may have heard, based on its remaining cash, Hovensa cannot fund operations beyond the middle of December, and our owners will not provide any funds for operations to continue beyond that date," Layton wrote.

He said the government has been advised of this several times over the last 18 months.

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Layton’s letter said Hovensa will make no further purchases of fuel. He said the stock of regular and premium gasoline is expected to last until about Jan. 7 and diesel supplies will be consumed by Feb. 12.

Hovensa reached agreement with Atlantic Basin Refining to sell the St. Croix refinery, subject to ABR and the government executing an operating agreement. The proposed agreement was the subject of an extensive Senate hearing Nov. 11 and 12, and lawmakers voted to send the deal to the Finance Committee for further discussion.

The report of the impending closure of the fuel rack was discussed during the hearing.

"If the Operating Agreement between the GVI and ABR currently before the Senate is not approved by mid-December, thereby allowing the sale of the refinery to take place, Hovensa’s cash will be depleted and the company will commence the process of shutting down its fuel storage terminal," Layton said in his letter. "Once the remaining fuel supply is exhausted, Hovensa’s truck loading rack will be shut down."

Layton said, effective immediately, Hovensa will limit fuel purchases for every customer to volumes consistent with the customer’s purchasing during the first two weeks of November.

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