🎈 Up Big Today: Find today's biggest gainers with our free screenerTry Stock Screener

Another US oil refinery to vanish with Lyondell Houston plant closing

Published 02/11/2024, 08:53 am
Updated 02/11/2024, 08:58 am
© Reuters. FILE PHOTO: The LyondellBasell refinery, located near the Houston Ship Channel, is seen in Houston, Texas, U.S., May 5, 2019.  REUTERS/Loren Elliott/File Photo
VLO
-
PSX
-
LYB
-

By Erwin Seba

HOUSTON (Reuters) - Chemical maker LyondellBasell Industries (NYSE:LYB) on Friday detailed its long-announced plan to permanently shutter its 263,776 barrel-per-day (bpd) Houston oil refinery in the first quarter of 2025.

The planned closing marks the latest in a wave of U.S. refinery closures as motor fuel demand is expected to peak this decade and decline under pressure from renewable fuels and electric vehicles.

In January, one of the facility's crude distillation units (CDU) and coker production train will shut, Lyondell refining chief Kim Foley told analysts on a call to discuss third-quarter results.

In February, the second CDU-coker production train, which supplies the gasoline-producing fluidic catalytic cracker (FCC) and ancillary units, will shut, ending motor fuel production, Foley said.

For the fourth quarter of this year, Lyondell plans to run the refinery at 90% of its capacity.

Lyondell originally planned to shutter the Houston refinery in 2023, but extended its life due to strong fuel margins. Last month, rival U.S. refiners Phillips 66 (NYSE:PSX) and Valero Energy (NYSE:VLO) announced plans to close one California refinery and put two others under review for possible closure in that state.

Phillips 66's 139,000-bpd Los Angeles refinery will cease production by the end of 2025.

"The refinery, if you think back historically, was originally designed to process in-state California crude production, and that has declined by about 75%," CEO Mark Lashier said.

© Reuters. FILE PHOTO: The LyondellBasell refinery, located near the Houston Ship Channel, is seen in Houston, Texas, U.S., May 5, 2019.  REUTERS/Loren Elliott/File Photo

Valero CEO Lane Riggs said last month "all options are the table" for the company's 91,300-bpd Wilmington and 145,000-bpd Benicia, California, refineries. New California laws for maintaining emergency inventories would penalize operators and make their refineries unprofitable, Valero said in a filing with the U.S. Securities and Exchange Commission.

In the last wave of U.S. refinery closures, which occurred between 2017 and 2022, nine crude oil refineries with a combined capacity of 1.2 million bpd were idled or converted to production of renewable fuels.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.