By Erwin Seba
HOUSTON (Reuters) – Chemical maker LyondellBasell Industries on Friday detailed its long-announced plan to completely shutter its 263,776 barrel-per-day (bpd) Houston oil refinery within the first quarter of 2025.
The deliberate closing marks the most recent in a wave of U.S. refinery closures as motor gas demand is predicted to peak this decade and decline below stress from renewable fuels and electrical autos.
In January, one of many facility’s crude distillation items (CDU) and coker manufacturing prepare will shut, Lyondell refining chief Kim Foley instructed analysts on a name to debate third-quarter outcomes.
In February, the second CDU-coker manufacturing prepare, which provides the gasoline-producing fluidic catalytic cracker (FCC) and ancillary items, will shut, ending motor gas manufacturing, Foley stated.
For the fourth quarter of this yr, Lyondell plans to run the refinery at 90% of its capability.
Lyondell initially deliberate to shutter the Houston refinery in 2023, however prolonged its life resulting from robust gas margins. Final month, rival U.S. refiners Phillips 66 and Valero Vitality introduced plans to shut one California refinery and put two others below evaluate for doable closure in that state.
Phillips 66’s 139,000-bpd Los Angeles refinery will stop manufacturing by the top of 2025.
“The refinery, in case you suppose again traditionally, was initially designed to course of in-state California crude manufacturing, and that has declined by about 75%,” CEO Mark Lashier stated.
Valero CEO Lane Riggs stated final month “all choices are the desk” for the corporate’s 91,300-bpd Wilmington and 145,000-bpd Benicia, California, refineries. New California legal guidelines for sustaining emergency inventories would penalize operators and make their refineries unprofitable, Valero stated in a submitting with the U.S. Securities and Alternate Fee.
Within the final wave of U.S. refinery closures, which occurred between 2017 and 2022, 9 crude oil refineries with a mixed capability of 1.2 million bpd have been idled or transformed to manufacturing of renewable fuels.
(Reporting by Erwin Seba in Houston; Enhancing by Matthew Lewis)