Oil & gas producer Hess Corp. (NYSE: HES) announced this morning that it has retained Goldman Sachs Group Inc. (NYSE: GS) to help the company explore the sale of its St. Lucia refined products storage terminal. The terminal is one of two the company owns in the Caribbean and has a capacity of 9 million barrels.
Prospects for a sale are weak. The St. Lucia terminal once stored refined products from its joint venture HOVENSA refinery in the US Virgin Islands, but that refinery is in the process of shutting down. Hess’ partner in the refinery is Petroleos de Venezuela S.A. (PdVSA), Venezuela’s national oil company. The HOVENSA refinery has a capacity of about 500,000 barrels/day and produced gasoline and heating oil for the US East Coast.
Unless PdVSA wants to purchase the terminal (not very likely), Hess could find itself with a very large white elephant on its hands that it will likely have to part with at a fire-sale price.
Hess shares closed at $62.55 on Friday within a 52-week range of $46.66-$87.19. The stock has had no action in the pre-market this morning.
Paul Ausick
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