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HomeNewsLocal newsLimetree Has a Lead Bidder, Extends Auction to November 15

Limetree Has a Lead Bidder, Extends Auction to November 15

A worker heads for the exit at Limetree Bay Refinery on Tuesday, May 25. (Source file photo)

A lead bidder has been designated for the purchase of St. Croix’s bankrupt Limetree Bay Refinery, and the auction date has been pushed out to Monday, Nov. 15, a hearing in federal bankruptcy court resolved on Wednesday.

The lead bidder sets the bottom price that others must meet or exceed in order to compete for the refinery’s assets and is believed to be one of two firms that are proposing to operate the plant as a going concern.

Sources confirmed St. Croix Energy is one of the two going-concern prospects that have thrown their hats in the ring. Limetree has also received several liquidation bids that could compete for the assets on auction day, its bankruptcy counsel Jimmy Parrish said. Those bidders would not operate the plant but would liquidate its assets by selling off scrap metal and other assets.

Bidders have until Friday, Nov. 12 to make good faith cash deposits. The designation of the winning bidder is set for Nov. 18.

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OSHA cites Limetree for $260,000 in safety violations

In other news, the court allowed the U.S. Occupational Safety and Health Administration to file a raft of citations for what it called “serious” violations in the wake of Limetree’s May 12 delayed coker failure and flare stack fire, amounting to almost $260,000 in proposed penalties.

During its inspection in the aftermath of the accidents, OSHA cataloged more than 40 pages of design, documentation and process failures that it alleges exposed Limetree’s employees and surrounding communities to “fire, toxic, and explosion hazards.”

The agency found no modeling had been done to give accurate, safe operating limits for the delayed coker, for example, so employees who worked in that unit were exposed to “explosions, fires from LPG, naphtha, gas oils, coke and toxic gases (H2S, benzene and carbon monoxide),” it alleged.

The employees were at further risk because Limetree didn’t provide shielding or a barricade to restrict and warn them of thermal radiation exposure in areas near Flare No. 8, OSHA wrote.

The inspection found storage tanks weren’t made to meet design specifications or regularly inspected and tested, so when a vacuum caused the tank to implode, employees were exposed to more hazards, the agency said.

And at startup, important safeguards were left undone; among them, correcting missing, corroded and pitted parts and surfaces needed to make the coke drums and pressure vessels safe, OSHA wrote.

Limetree has the right to respond to the citations but has not yet done so. Despite the gravity of the allegations, the court considers OSHA an unsecured creditor, so it’s unlikely the steep penalty will be paid.

Correcting the safety and design deficits, ordinarily the owner’s responsibility, will depend on who purchases Limetree and, if it restarts, whether or not OSHA follows through to make sure it does so safely.

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