Sale of LyondellBasell refinery in Houston is among its options
LyondellBasell on Wednesday said a sale of its Houston crude oil refinery is among the options it’s considering for the plant.
The chemical company, with headquarters in Houston and the Netherlands, didn’t disclose a potential asking price for the plant, which sits on 700 acres on the Houston Ship Channel. Analysts at Tudor, Pickering, Holt & Co. value it from $500 million to $800 million.
The refinery is one of the largest in the United States, capable of refining 268,000 barrels of oil per day of crude into transportation fuels such as reformulated gasoline, ultra-low sulfur diesel and jet fuel, as well as products like lubricants and petroleum coke.
“While the Houston refinery is a valuable, well-performing asset, we have long held the belief that it may be even more valuable as part of a larger refining system,”
CEO Bob Patel said in a news release. “To that end, we are actively gauging market interest in this business with the goal of delivering the greatest value to all our stakeholders.”
The plant will likely take some time to sell, according to Tudor,
Pickering, Holt & Co. analyst Matthew Blair.
“The problem is, there are no buyers,” Blair said. “Valero would be the logical fit, but they are focused on debt reduction and renewable diesel growth.”
LyondellBasell took sole ownership of the Houston refinery in 2006 after buying out minority owner Citgo Petroleum.
The chemical company first attempted to sell the Houston refinery in 2016 but took it off the block in January 2017 after weighing potential offers.
Refineries took a hit during the pandemic as most travel came to a halt and demand for fuel plummeted.
Several refinery closings during the pandemic decreased U.S. refinery capacity by 4.5 percent to 18.1 million barrels per day at the start of 2021, according to the Energy Department.
While demand for gasoline and diesel fuel has returned to pre-pandemic levels, jet fuel demand remains depressed because of global aviation restrictions caused by the pandemic.
Other refiners also are looking to sell their plants, including Phillips 66. The Houston refiner last month said it is seeking a buyer for its Alliance refinery in Belle Chasse, La.