Valero and CVR Energy Shake Up Refinery Sector with Acquisitions

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Written by Aaron Studwell, Ph.D. and Daniel J. Graeber for, IIR News Intelligence (Sugar Land, Texas)

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Summary

In less than a week, CVR Energy Incorporated announced it has agreed to acquire two refineries from Marathon Petroleum Corporation for approximately $4.2 billion and Valero Energy said it would hand over $320.5 million to take over the Houston Refinery from LyondellBasell Industries.

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Two Major Refinery Acquisitions in a Week

Refineries rarely change hands, but in less than a week, two separate companies have shaken up the U.S. refinery sector with acquisitions. In the larger of the two deals, CVR Energy Incorporated has agreed to acquire two refineries and associated marketing operations from Marathon Petroleum Corporation. The second deal will see Valero Energy taking over the Houston Refinery from LyondellBasell Industries and partially restart the plant by year-end 2027.

CVR Energy Acquiring Two Marathon Refineries

CVR Energy Incorporated has agreed to acquire two refineries and associated marketing operations from Marathon Petroleum Corporation for approximately $4.2 billion, plus net working capital. The transaction would nearly double CVR's refining capacity, while transferring ownership of two major Upper Midwest facilities from Marathon.

The acquisition includes Marathon's 101,000-barrel-per-day (bpd) St. Paul Park Refinery in Minnesota and its 76,000-bpd Mandan Refinery Center in North Dakota. Together, the facilities would add 177,000 bpd of crude processing capacity to CVR's existing operations. This acquisition by CVR will increase its total capacity from approximately 205,000 bpd to 382,000 bpd, an increase of over 86%.

CVR currently operates two refineries: the 135,000-bpd Coffeyville Refinery in Kansas and the 70,000-bpd Wynnewood Refinery in Oklahoma. Upon completion, CVR would operate four refineries spanning the Central Plains, Upper Midwest, and Northern Great Plains, substantially expanding its geographic reach and access to regional transportation fuel markets.

The transaction also includes Marathon's related wholesale marketing business for the refineries, which supplies up to 590 branded locations. These distribution channels would provide additional outlets for gasoline, diesel, jet fuel, and other petroleum products, enabling CVR's ability to market production across its expanded refining network.

Financing and Ownership Structure

CVR plans to finance the acquisition through a combination of $2.5 billion in committed secured debt, a $500 million equity commitment from its controlling shareholder, an $800 million investment from Trafigura US Holdings, and available cash.

Trafigura's investment would establish a minority equity position in CVR. Following completion, Trafigura Trading LLC would become the exclusive crude oil supplier and intermediation counterparty for the acquired facilities, while entering into agreements to purchase certain refined petroleum products.

The arrangements would give Trafigura a significant commercial role in supplying and marketing products from the two refineries, although CVR would retain operational ownership.

CVR expects the transaction to close by the end of 2026, subject to regulatory approvals and customary closing conditions. The company anticipates approximately $70 million in annual cost savings and other operational benefits as the expanded refining and marketing businesses are integrated.

Valero to Buy and Restart LyondellBasell's Refinery in Houston

Valero Energy on Friday, October 30, said it would hand over $320.5 million to take over the Houston Refinery from LyondellBasell Industries and partially restart the plant by year-end 2027.

LyondellBasell closed its Houston Refinery in early 2025. Located on a 700-acre site at the city limits of Houston and Pasadena, data from Industrial Info show the refinery had the capacity to process 268,000 bpd of crude oil. Valero said it would initially bring 165,000 bpd of throughput online by 2027.

"This acquisition is a unique opportunity to strategically expand Valero's U.S. Gulf Coast footprint at a fraction of replacement value and enhance the long-term strength of our refining system," said Lane Riggs, the top brass at Valero.

LyondellBasell's plant is adjacent to Valero's refinery in Houston that sits along the Houston Chip Channel. Data from Industrial Info show the plant can process 217,000 bpd.

Previously, LyondellBasell's refinery was considered for repurposing. Two years ago, executives were considering a hydrogen hub at the facility (covered in this IIR story). There was also consideration back in 2022 the facility could be converted to a pyrolysis process plant to produce renewable-based pyrolysis oil from waste plastic pellets, but that was put on hold.

Earlier in October, Valero reported that its refining segment yielded $8.8 billon in net income during the third quarter, compared to $1.6 billion during the same period last year. Higher commodity prices are supporting higher crack spreads to the benefit of refiners.

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