LyondellBasell to Quit Refining by 2023
LyondellBasell (LYB) is finally calling it quits on the refinery business and has announced plans to close its Houston facility “no later than December 31, 2023.” The plant in the Houston Ship Channel has a rated capacity to transform 268,000 barrels per day of crude oil into transportation fuels and other products including lubricants, chemical intermediates and petroleum coke.
In the run-up to the shutdown, the Dutch-headquartered, Texas-managed petrochemicals and plastics group said it will continue serving the fuels market, which it expects to remain strong in the near-term, and consider potential transactions and alternatives for the site.
"After thoroughly analyzing our options, we have determined that exiting the refining business by the end of next year is the best strategic and financial path forward for the company," said interim CEO Ken Lane (new CEO Peter Vanacker is due to take up the position on May 23).
"While the decision to exit the refining business advances was “difficult,” Lane said the exit furthers LYB’s decarbonization goals, and the site's prime location “gives us more options for advancing our future strategic objectives, including circularity."
LyondellBasell acquired the majority of the Houston facility in its 2006 buyout of Citgo, and after multiple outages made its first attempt to unload it in 2016 for a mooted $1 billion. After failing to find a buyer, management announced in early 2017 that it had decided to hang onto it, but in September 2021 made a second attempt to find a taker – which evidently was again unsuccessful.
In its 2020 balance sheet, the company took an impairment charge of $582 million on its refining business. Houston, LYB’s sole refinery, is one of the largest in the US, with output capability for propylene and aromatics such as benzene, paraxylene and orthoxylene.
Recently, a number of energy and petrochemical groups have started seeing a liability in having major fossil fuel assets. But even in light of the Russian invasion of Ukraine, which has opened the door not only to selling energy too Europe but has also put a premium on transportation fuel in the US, a large refinery does not seem to have suddenly become an asset.
Author: Dede Williams, Freelance Journalist
