Economic Insider

Lyondell Basell to Close Houston Oil Refinery in Exit from Refining

Photo: Reuters. Chemical maker Lyondell Basell Industries announced on Thursday. it will permanently close its Houston crude oil refinery by the end of 2023.

This decision follows the closing of five US refineries in the last two years. after two failed attempts to sell the plant. Recently, refining has been afflicted by high costs and low margins.

Ken Lane Said

“After thoroughly analyzing our options. we have determined that exiting the refining business by the end of next year. It is the best strategic and financial path forward,” said Ken Lane, interim chief executive.

The refinery, which makes gasoline, diesel, and jet fuel. It will remain in operation and the company will continue to seek potential transactions. alternatives for the roughly 700-acre site on the Houston Ship Channel.

The company had previously taken a $264 million impairment charge as part of its decision to quit the refinery. Lyondell has twice mounted efforts to sell the 263,776 barrel-per-day refinery in the last 10 years. But failed to conclude a deal.

John Auers, executive vice president of Turner, Mason & Co. a Dallas-based energy consultancy, said Thursday’s announcement. “there will definitely be people knocking on the door” to look at the refinery.

“The refinery could sell for a significant amount,” Auers said. “I certainly don’t expect it to close given this statement.”

Lyondell said the refinery no longer fits with its global petrochemical production. It had once been the anchor of its supply chain as a regional chemical company.

Shutting the refinery provides opportunities for the company, Lane said.

“While this was a difficult decision, our exit of the refining business advances the company’s decarbonization goals. the site’s prime location gives us more options for advancing our future strategic objectives, including circularity,” Lane said.

Circularity refers to efforts by plastics manufacturers to increase spare finished plastics from landfills. return them to the supply chain for chemical plants.