July 31, 2022 [Reuters] – Chemical maker Lyondell Basell Industries (LYB.N) has turned away at least one would-be buyer of its Houston crude oil refinery due for closure in December 2023, said sources familiar with the matter.
The would-be buyer is also located on the Houston Ship Channel and has the resources to finance a purchase of the 263,776 barrel-per-day (bpd) Houston refinery, the sources said.
A Lyondell spokesperson did not immediately reply to a request for comment on Thursday.
Five refineries closed during the COVID-19 pandemic as demand fell amid lockdowns and work-from-home policies. U.S. refining capacity dropped by 1.1 million bpd to 17.9 million bpd this year, according to U.S. Energy Information Administration data. The contraction in refining capacity has contributed to a sharp increase in fuel prices worldwide.
Lyondell is scheduled to report second-quarter earnings on Friday.
Sources familiar with mergers and acquisitions in the U.S. refining industry said it appeared Lyondell has ended efforts to sell the refinery.
People familiar with plant operations said Lyondell dropped marketing efforts before announcing in April plans to close the refinery, which employs about 800 people, in 2023.
Faced with a $1 billion pricetag to keep the refinery operating after 2023, Lyondell decided to cease production when no acceptable buyers were found in 2021, said Chief Financial Officer Michael McMurray in June.
The company sees opportunities for the refinery’s hydrotreating units, which can be converted for upgrading hydrocarbons made from recycled plastic, McMurray said.
Shutting the refinery will put the company half-way to its target for cutting carbon emissions by 2030, which will yield financial benefits, he said.
The refinery supplied feedstocks to Lyondell’s chemical plants when it was a regional producer early in this century. But as Lyondell expanded into a global chemical producer, the refinery became a leftover.
Lyondell mounted at least two campaigns to sell the refinery. Both failed.
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