Eric Watkins
Oil Diplomacy Editor
LOS ANGELES, Oct. 28 -- Hess Corp. has begun preparatory work for the construction of a multibillion dollar refinery in St. Lucia, according to a senior government official.
"Quite a substantial amount of money has been committed to the feasibility studies, and the studies undertaken so far conclude that there will be no problems putting in the refinery," said Guy Joseph, communications and works minister.
"From all indications things look very good because I don't think Hess would spend this kind of money in feasibility studies and all that for nothing," Joseph told Caribbean Media Corp. (CMC).
He said the refinery, expected to cost more than $5 billion, is to be built near the existing oil terminal at Cul de Sac, an area 12 miles southwest of Castries, the island nation's capital.
Recently, according to CMC, St. Lucian Prime Minister Stephenson King led a delegation to the US for further discussions on the project with Hess representatives.
In July 2007, St. Lucia and Hess extended an agreement allowing the energy company to operate a fuel transshipment terminal in the Caribbean nation.
The new agreement, which also extended an option to build a refinery in St. Lucia, was announced by King over national television.
Under the new agreement, Hess will pay the St. Lucian government 5¢/bbl of oil stored at the terminal and 10¢/bbl of refined product.
The previous agreement, which was to expire in 2013, paid St. Lucia 2¢/bbl of crude and 4¢/bbl for products. The new agreement expires in 2057.
At the time, King said Hess agreed to establish a vocational training program in St. Lucia so that islanders can qualify for jobs at the refinery—if the company decides to pursue the project.
At the time, however, Hess said it had no immediate plans to build a refinery in St. Lucia.
A Hess subsidiary already operates the 495,000 b/d Hess Oil Virgin Islands Corp. refinery in St. Croix, VI.
Contact Eric Watkins at [email protected].