(Reuters) – Motiva Enterprises has preliminarily been chosen by the government of Curacao to operate the 335,000-barrel-per-day Isla refinery, replacing Venezuela’s state-run PDVSA, local media said on Saturday.
The refinery has been idle since May when a legal dispute between PDVSA and U.S. producer ConocoPhillips (COP.N) forced its closure.
PDVSA’s contract to run the facility, which is crucial for its storage, refining and shipping operations, will expire at the end of 2019. The government of the Caribbean island is seeking a company willing to handle it in the long run and probably also to finish the lease term next year.
Motiva, based in Houston, was chosen by Curacao from a list of interested companies as the “preferred bidder” to run the refinery from 2020 or possibly before, if a separate agreement is reached, according to the Antilliaans Dagblad newspaper.
Motiva is a U.S. subsidiary of Saudi energy giant Aramco and a regular buyer of Venezuelan crude.
The Curacao refinery on Saturday confirmed a company was chosen but said it would not disclose the name of the new operator until a final agreement is signed.
Motiva declined to comment in a statement.
A memorandum of understanding between the chosen operator and the government is expected to be signed in mid-January, the manager of the refinery, Marcelino de Lannoy, told Reuters.
Lannoy, who is temporarily replacing Isla’s managing director, Roderick Van Kwartel, amid accusations of corruption linked to the bidding process to choose the new operator, also said PDVSA has agreed to cooperate in any transition.
PDVSA did not immediately respond to a request for comment.
Curacao Refinery Utilities (CUR), the company that provides water and electricity to the facility, is expected to resume supply this month to prepare the refinery for its restart.
Earlier this year, Motiva said it was weighing an expansion of its Port Arthur, Texas, refinery. But in June that plan was scrapped over what sources said were worries about concentrating too much production in a single, hurricane-prone location.
Instead, Motiva was “actively exploring a number of opportunities and locations” to boost its North American refining capacity to as much as 1.5 million barrels per day, a Motiva spokeswoman said.
(This story has been refiled to fix typographical error and change “Antillians” to “Antilliaans” in fourth paragraph)