The Limetree Bay refinery on the island of St. Croix will be shut down forever due to "extreme financial constraints."
"This was an extremely difficult decision for us," chief executive Jeff Rinker said in a statement, as carried by The Associated Press. "Unfortunately, this is our only option."
The investors in the facility had poured some $3 billion into their plan to revive the 210,000-bpd refinery.
The decision follows an order from the U.S. Environmental Protection Agency issued last month to shut down the refinery because of "multiple improperly conducted operations that present an imminent risk to public health."
The order followed a flaring session in mid-May, which released oil droplets over nearby neighborhoods. Following the release, the operator of Limetree Bay voluntarily shut down. According to the EPA, the refinery was violating the Clean Air Act because it was "substantially endangering public health, welfare, or the environment."
In addition to the oil droplets, the environmental authority found the Limetree Bay facility exceeded the limit of sulfur dioxide emissions, the EPA noted.
Following that order, the Governor of St. Croix, Albert Bryan Jr., issued a statement in which he welcomed the EPA's intervention.
"I have been assured by the CEO of Limetree Bay Refining that Limetree Bay is both willing and able to comply with the conditions set by the EPA to include the request for additional monitoring stations on the island," Bryan said last week.
The Limetree refinery was idle for four years until 2016, when ArcLight Capital Partners and EIG Global Energy Partners acquired it and set about to restart it.
Initially, the crude oil processing facility was supposed to resume operations in 2019, but the deadline was extended several times before the facility finally began operating last year. However, multiple problems caused a shutdown earlier this year, before the EPA's order shut it down again for at least two months.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com More