The Future of LyondellBasell’s Houston Refinery Still Under Review

Reuters, January 28, 2022

Chemical producer LyondellBasell Industries said on Friday its Houston refinery would be a better fit with a larger oil processing company and that a sales effort continues.

The company put its 263,776-barrel-per-day (bpd) plant on the market for a second time last fall. The plant ran at 101% of capacity last quarter on the recovery of motor fuels demand, the company said in a statement accompanying its fourth-quarter earnings announcement.

Interim Chief Executive Kenneth Lane said LyondellBasell hopes within a few months to reveal the outcome of its strategic review of the plant. The company took a $264 million impairment charge in the fourth quarter as part of the decision to exit refining.

"There's really not more that we can say at this time," Lane told Wall Street analysts on a conference call. "We're in the middle of that (strategic review) process as we speak. And with where we are right now, I hope to be able to provide more details of the outcome in the next few months."

When the process began in September, sources familiar with the matter told Reuters the company hoped for a quick sale of the plant on the Houston Ship Channel. But hopes for a fast exit from refining appear to be dwindling, with a number of other refineries also hitting the market.

In the past decade, Lyondell came to view the refinery as unnecessary to the company's expansion into chemical production globally. LyondellBasell attempted to sell the refinery in 2016, but a deal fell apart when the company sought a higher price for the plant.

LyondellBasell plans to operate its Houston refinery above 90% of its capacity during the first quarter of 2022, said Chief Financial Officer Michael McMurray.

(Reporting by Erwin Seba; Editing by Gary McWilliams and Matthew Lewis)

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