Above: the HOVENSA refinery in St Croix

By the Caribbean Journal staff

The HOVENSA oil refinery in St Croix, US Virgin Islands, will be shut down, the company announced today.

The refinery, which is one of the 10 largest in the world and the largest in the Caribbean, is a joint venture between the Hess Corporation and Petroleos de Venezuela SA.

Hess cited weakness in demand for petroleum products due to the global economic slowdown and the addition of new refining capacity in emerging markets as factors leading to the shutdown.

It also said the low price of natural gas in the United States had place HOVENSA at a “competitive disadvantage.”

The company said it had explored other options to keep the refinery operating, but financial losses “left it with no other choice.”

The US government has previously found the refinery to be in violation of its federal Clean Air Act, saying in August that there had been “too many chemical releases and other potentially dangerous incidents at the HOVENSA facility in recent years, including three in January 2011 alone,” according to EPA Regional Administrator Judith Enck.

It is not clear whether that played a role in the shutdown.