(Reuters) Equipment corrosion at an oil refinery in the U.S. Virgin Islands presents a risk of fire, explosion or other "catastrophic" releases of hazardous substances, U.S. environmental regulators said, after performing an inspection last month.
The idled St. Croix refinery, formerly called Limetree Bay, was shut down by the U.S. Environmental Protection Agency in May 2021 after a series of chemical releases into the environment sickened neighboring residents. The refinery was sold for $62 million in December 2021 for $62 million to West Indies Petroleum and Port Hamilton Refining and Transportation, following the bankruptcy of its former private equity owners.
An August 2022 fire within the petroleum coke conveyor loading system burned for two weeks, prompting the inspection, an EPA regional administrator said in an Oct. 13 letter sent to the owners' lawyers and made public recently.
Inspectors found corrosion on process valves, flanges, pipes, nuts, bolts and pressure relief devices, adding that gaskets were in poor condition. The owners also failed to provide hazard assessments and other documentation for the facility, the EPA said.
They were 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 general public if released.
Failure to safely maintain equipment that contains hazardous materials violates part of the Clean Air Act, according to the letter.
Private equity investors including Arclight and EIG had poured $4.1 billion into reviving the idled, aging refinery - formerly the largest in the Western Hemisphere - before filing for bankruptcy in September 2021.
