The U.S. Virgin Islands has signed an $800 million deal to sell what was once the world's largest oil refinery to a Boston-based equity firm.
The government announced Tuesday that it would receive a $220 million upfront payment from ArcLight Capital Partners' Limetree Bay Holdings as part of the 25-year deal that is expected to create hundreds of jobs. Gov. Kenneth Mapp said the HOVENSA oil storage facility in St. Croix would be expanded and a $6 million asphalt plant would be built.
He said the deal requires that 80 percent of all workers be Virgin Islanders. The deal also provides $30 million to continue cleanup of the site and awards the government 330 acres (134 hectares) of HOVENSA land to build 130 homes and a vocational school.
Legislators are scheduled to meet Dec. 17 to debate the deal, which requires their approval.
The refinery closed in early 2012 after years of weak demand and high operating costs, delivering an economic blow to the U.S. territory.
Mapp said if the deal is approved, the government would not be forced to borrow money for at least three years since it would receive a minimum of $7 million a year from Limetree.
"These dollars will help balance the budget while we rebuild our economy,'' he said.
The government had filed a lawsuit against U.S. oil company Hess Corp. in September for more than $1 million, accusing the firm of abandoning the refinery it had promised to run through 2022. The Hess subsidiary that owns the refinery later announced that it would file for Chapter 11 bankruptcy, which would allow it to sell the refinery as a storage facility, a move the government tried to prevent.
Mapp said the government has since reached a settlement with HOVENSA.