Hess 2011 Annual Report Download - page 15

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13
REFINING
HOVENSA, a joint venture between Hess Corporation
and Petroleos de Venezuela S.A. announced in
January 2012 that it would shutdown its refinery
on St. Croix, United States Virgin Islands. Following
the shutdown, the complex will operate as an oil
storage terminal. Losses at the HOVENSA refinery
totaled $1.3 billion over the past three years and
were projected to continue. These losses were
caused primarily by weakness in demand for refined
petroleum products due to the global economic
slowdown and the addition of new refining capacity
in emerging markets. In the past three years, these
factors have caused the closure of 18 refineries in the
United States and Europe with capacity totaling
more than 2 million barrels of oil per day. In
addition, the low price of natural gas in the
United States put HOVENSA, an oil-fueled
refinery, at a competitive disadvantage.
Hess’ Port Reading, New Jersey, fluid catalytic
cracking (FCC) facility located near New York
Harbor produces gasoline and fuel oil primarily for
markets in the Northeast United States. The facility
averaged feedstock runs of about 63,000 barrels
per day in 2011 versus 55,000 barrels per day in
2010. Feedstock runs were higher in 2011 due to
a planned major turnaround the previous year.