(Credit: LyondellBasell)LyondellBasell has announced its decision to cease operation of its Houston Refinery no later than December 31, 2023. "While this was a difficult decision, our exit of the refining business advances the company's decarbonization goals, and the site's prime location gives us more options for advancing our future strategic objectives, including circularity," said Ken Lane, interim CEO of LyondellBasell.
According to MarketWatch, LyondellBasell is said to be expecting to face charges related to this plan into 2024, mostly consisting of charges between $300-$400 million for accelerated amortization of operating lease assets, charges between $150-$250 million for asset decommissioning, and around $200 million in other costs.
Reuters mentions that the reason for the refinery’s closure may be due to higher operating costs and ultimately low profits.
LyondellBasell will continue operating the refinery until its closure, while also considering alternative options for the site. Tank Storage Magazine says that the company has not yet given an indication regarding what these other options might be, but that “other companies which have shut refineries have opted to turn the sites into terminals, including Phillips 66 with its Alliance, Louisiana refinery, Engen in Durban, South Africa, and ExxonMobil in Victoria, Australia.”
Lane added, "After thoroughly analyzing our options, we have determined that exiting the refining business by the end of next year is the best strategic and financial path forward for the company."
