Fire may trigger early closure of Lyondell refinery, sources say
Recasts with possible impact from Thursday fire
By Erwin Seba
HOUSTON, Aug 30 (Reuters) -A Thursday night fire at Lyondell Basell Industries' LYB.N 263,776 barrel-per-day (bpd) Houston refinery may lead the company to permanently shut the plant ahead of its scheduled closure at the end of March 2025, people familiar with plant operations said on Friday.
Workers were removing insulation around the reactor of the 110,000-bpd gasoline-producing fluidic catalytic cracker (FCC) on Friday, the sources said.
The length of repairs needed on the reactor, where fine powder catalyst converts gas oil into unfinished gasoline, could be decisive in determining how long the refinery will continue to run.
A Lyondell spokesperson declined on Friday to comment on the status of the FCC, but did say the company remains committed to exiting refining.
"The delay of our oil refining business exit to no later than the end of the first quarter of 2025 does not change our decision to cease operation of the refinery," the spokesperson said. The extension will minimize workforce impacts as we continue to develop future options for the site."
Chemical maker Lyondell initially announced it planned to shut the refinery at the end of 2023, to avoid the cost of needed overhauls at the refinery. Analysts estimated the company would need to spend up to $1 billion for needed overhauls.
Lyondell then said in May 2023 it would extend the deadline to no later than end of the first quarter 2025, because of greater confidence in the refinery's reliability.
Lyondell CEO Peter Vanacker said on Aug. 2 the refinery was a "capital-intensive asset that has historically only delivered brief periods of profitability."
During the Aug. 2 conference call in which Vanacker spoke, the company said the refinery would operate in the third quarter at90% of its capacity.
Reporting by Erwin Seba; editing by Jonathan Oatis
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