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Another US oil refinery to disappear as Lyondell Houston plant closes

Chemical manufacturer LyondellBasell Industries detailed Friday its long-announced plan to permanently close its 263,776 barrels per day (bpd) Houston oil refinery during the first quarter of 2025.

The planned closure is the latest in a wave of refinery closures in the United States, as fuel demand is expected to peak this decade and decline under pressure from renewable fuels and electric vehicles.

In January, one of the crude distillation units (CDUs) and the coker production train will close, Kim Foley, head of refining at Lyondell, told analysts on a third-quarter earnings conference call.

In February, the second CDU-coker production train, which feeds the gasoline-producing fluid catalytic cracker (FCC) and auxiliary units, will shut down, ending fuel production, Foley said.

For the fourth quarter of this year, Lyondell plans to operate the refinery at 90% capacity.

Lyondell originally planned to close the Houston refinery in 2023, but extended its life due to high fuel margins. Last month, rival U.S. refiners Phillips 66 and Valero Energy announced plans to close a California refinery and review two others for possible closure in the state.

The 139,000 bpd Phillips 66 refinery in Los Angeles will cease production by the end of 2025.

“The refinery, historically speaking, was originally designed to process the state of California's crude oil production, which was down about 75 percent,” said Mark Lashier, CEO of Phillips 66.

Last month, Valero CEO Lane Riggs said “all options are on the table” for refineries in Wilmington (91,300 bpd) and Benicia (145,000 bpd), California. California's new emergency stockholding 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 refinery closures in the United States, which took place between 2017 and 2022, nine crude oil refineries with a combined capacity of 1.2 million bpd were idled or converted to the production of renewable fuels.

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