By Erwin Seba
HOUSTON (Reuters) – Chemical maker LyondellBasell Industries on Friday outlined its long-announced plan to permanently close its 263,776 barrels per day (bpd) oil refinery in Houston in the first quarter of 2025.
The planned closure marks the latest in a wave of U.S. refinery closures as demand for motor fuels is expected to peak this decade and decline under pressure from renewable fuels and electric vehicles.
In January, one of the facility’s crude oil distillation units (CDU) and coke production train will be closed, Lyondell refinery head 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 fluid catalytic cracker (FCC) and associated units, will close, ending motor fuel production, Foley said.
For the fourth quarter of this year, Lyondell plans to operate the refinery at 90% of capacity.
Lyondell originally planned to close the Houston refinery in 2023, but extended its life due to strong fuel margins. Last month, rival U.S. refiners Phillips 66 and Valero Energy announced plans to close one refinery in California and explore two others for possible closure in that state.
The 139,000 barrel per day Phillips 66 refinery in Los Angeles will cease production by the end of 2025.
“If you think back historically, the refinery was originally designed to handle crude production in California, and that has declined by about 75%,” said CEO Mark Lashier.
Valero CEO Lane Riggs said last month that “all options are on the table” for the company’s 91,300 bpd Wilmington and 145,000 bpd Benicia, California, refineries. New California emergency stockpiling laws would penalize operators and make their refineries unprofitable, Valero said in a filing with the U.S. Securities and Exchange Commission.
During the latest wave of U.S. refinery closures, which occurred between 2017 and 2022, nine crude oil refineries with a combined capacity of 1.2 million barrels per day were shut down or converted to produce renewable fuels.
(Reporting by Erwin Seba in Houston; Editing by Matthew Lewis)
