(Reuters) U.S. environmental regulators conditionally approved plans for the owners of an idled refinery in the U.S. Virgin Islands to remove chemicals that the watchdog argued present serious health consequences if accidentally released.
The idled St. Croix refinery, formerly the largest in the Western Hemisphere, was expected to boost overall supply in the Caribbean, a key transit point for petroleum shipments, but the EPA shut it after a few months of operation in May 2021 after chemical releases sickened neighboring residents.
Equipment corrosion at the refinery, formerly called Limetree Bay, presents a risk of fire, explosion or other "catastrophic" releases of hazardous substances, the U.S. Environmental Protection Agency said last year.
Regulators inspected the facility following an August 2022 fire within the petroleum coke conveyor loading system that burned for two weeks.
The refinery was sold for $62 million in December 2021 to West Indies Petroleum and Port Hamilton Refining and Transportation, following the bankruptcy of its former private equity owners.
The plant owners intended to restart the facility but the EPA said they let it fall into disrepair.
The EPA was particularly concerned about equipment containing ammonia, which can irritate or burn the eyes and skin, and liquefied petroleum gas (LPG), which can cause nausea and headaches. The chemicals, they say, present "serious health consequences" to facility workers and the public if released.
In December, the EPA entered into a binding agreement with Port Hamilton Refining and Transportation to begin removing the ammonia, LPG and amine solution in early March and finish in the summer of 2023.
Port Hamilton contractors will remove the anhydrous ammonia by transferring it to specially designed shipping container for sale or disposal, regulators said.
Contractors will transfer the LPG into shipping containers for off-island sale as useable products or for proper disposal, the EPA said.
The EPA said it will display real time results from "around-the-clock" air monitoring during the removal process.
U.S. regulators say the new owners cannot restart the plant unless they obtain a Clean Air Act permit, which could cost hundreds of millions of dollars and take three years or more.
The owners are appealing the decision, according to court filings.
