The refinery, which is owned by both Hess and PDVSA, was shut in 2012 due to poor refining economics. The refinery was a regular products supplier to the U.S. East Coast, including Florida, prior to its shutdown. Hovensa is currently operating as an oil storage terminal.

Traders said that the Jones Act exemption for Hovensa, allowing the use of foreign ships for products delivery to the U.S. East Coast, could be a positive for the refinery restart plan.

The limited Jones Act fleet has forced the U.S. Southeast to rely more on Europe for oil products supplies in the past few years, and a switch to New York Harbor benchmark prices and away from the Gulf Coast.

Hovensa has agreed in principle with an unidentified buyer for the sale of its refinery assets, U.S. Virgin Islands Governor John de Jongh said on Monday.

A Hovensa spokesman said on Tuesday that the company has no comments on the refinery deal in principles, the governor’s comments or the plans for operational restart.

The governor met Sunday with 11 members of the 30th Legislature in the U.S. Virgin Islands to provide an update on the Hovensa sales process.

“Today’s meeting provided the opportunity for me to update our senators on what progress has been made towards the sale of the south shore refinery on St. Croix.

After a sales process that included an outreach to more than 140 entities that had expressed a potential interest, which number included refiners, national oil companies, trading companies and private equity firms, I was able to report that an agreement in principle has been arrived at between Hovensa and a prospective buyer,” de Jongh said.

“Now we are to begin the process of negotiating an agreement between that entity and the government. But before I formally began that process, I wanted to review with the senators the overall process, the issues, the risks and our expectations,” he added.

Citing the delicate and tentative nature of the negotiations, de Jongh said he could not identify the company, but he did acknowledge that additional time is required to determine whether the company’s proposed plans for the Hovensa site are feasible.

“I am inclined to allow this process the fullest of opportunities to take shape, as my goal since HOVENSA’s closing of the refinery has always been to see if we can find a party interested in and capable of restarting the refinery and putting our people back to work.

This goal – job opportunities for Virgin Islanders – is a shared goal which was high on the list of concerns voiced at today’s meeting by the members of the Senate.”

The governor has named Attorney General Vincent Frazer to lead the team of government officials and advisors charged with exploring the feasibility of the prospective buyer’s proposal and, if feasible, negotiating an agreement to achieve the sale of the refinery and its operation under an agreement which assures the interests of the Territory to the maximum degree achievable.

OPIS notes that the U.S. Virgin Islands granted tax concessions to Hovensa when it was operating as a refinery, and it was a major employer on the island.