Mapp says Legislature approved St. Croix refinery agreement and urges action on GERS measures

Gov. Kenneth E. Mapp said on July 27, 2018, that the 32nd Legislature had ratified an agreement to resume oil refining on St. Croix, while leaving out other parts of his proposal tied to the Government Employees Retirement System.

According to Government House, the agreement with ArcLight Capital, ratified early on July 26, 2018, called for approximately $1.4 billion in refinery refurbishment at Limetree Bay Terminals. The administration said the project was expected to create more than 1,300 local construction jobs during the building phase and as many as 700 permanent jobs once refining operations began, in addition to more than 750 jobs at the terminal storage facility.

Mapp said he remained concerned that senators did not act on provisions that would have directed revenue to GERS. Government House said his original proposal called for GERS to receive half of the $615 million projected to be generated by the refinery over 10 years.

The administration also said senators did not consider a proposal for the Virgin Islands Public Finance Authority to acquire Havensight Mall from GERS and lease the Port of Sale property, with GERS to receive 50 percent of net revenues in perpetuity. It also said lawmakers did not act on a proposed $10 million equity loan to Island Global Yachting for construction of a 110-room hotel at Yacht Haven Grande.

Under the refinery agreement, Government House said ArcLight would make a $70 million payment to the Virgin Islands government at closing, including $30 million for about 225 acres of land and 122 homes, and a $40 million prepayment of taxes by a new refinery entity. After that tax prepayment was credited, the company would make annual payments in lieu of taxes at a base rate of $22.5 million, with adjustments that could raise the amount to as much as $70 million a year or lower it to no less than $14 million.

Government House said the initial refining operations were planned to process about 200,000 barrels of crude oil per day. It said the territory anticipated more than $600 million over the first 10 years of restarted refining operations, in addition to the $11.5 million then being received annually from the oil storage terminal.

Official source: https://www.vi.gov/governor-thanks-senators-for-approving-refinery-agreement-urges-action-on-measures-to-direct-revenue-to-gers/