(Bloomberg) -- LyondellBasell Industries NV will exit the crude-oil processing business with the permanent shutdown of its sole refinery early next year.
The chemical company plans to start the closure of its Houston refinery in January, according to an earnings presentation, after failing to find a buyer for it. The shuttering, first announced in 2022 and postponed multiple times, comes amid weaker profit margins after rivals Exxon Mobil Corp. and Marathon Petroleum Corp. added oil processing capacity on the Gulf Coast.
When it was built in 1918, the 264,000-barrel-a-day facility was the first of many refineries on the Houston Ship Channel, locally dubbed the refinery corridor of Texas. It was ideally located to buy crude from Venezuela and Mexico before the US shale boom started. When cheap oil from the Permian Basin started to flow, the facility became less competitive. While several fuelmakers retooled their refineries to handle the light oil produced in Texas, New Mexico and North Dakota, Lyondell continued to heavily rely on imported supplies that became costlier over time, squeezing margins.
The company will shutter one of its crude units and a coker in January, according to the presentation. A second crude unit and coker, a gasoline-making fluid catalytic cracker and other units will be mothballed during February, it said. Since LyondellBasell disclosed plans to close the facility, the refinery suffered at least two fires, one in January 2023 and another in August. The company also said that it’s conducting a strategic review of its operations in Europe.
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