U.S. Refinery Closures, Conversions Continue

Researched by Industrial Info Resources (Sugar Land, Texas)--LyondellBasell Industries NV (NYSE:LYB) (Rotterdam, Netherlands) plans to shut its Houston Refinery in Texas, one of the largest in the U.S., in an effort to exit its refining business--continuing a pattern of recent domestic refinery closures and conversions to renewable fuel production.

LyondellBasell expects to close the 268,000-barrel-per-day (BBL/d) refinery by the end of 2023. Subscribers to Industrial Info's Global Market Intelligence (GMI) Petroleum Refining Plant Database can click here for the plant profile. "While this was a difficult decision, our exit of the refining business advances the company's decarbonization goals," said Ken Lane, interim chief executive officer of LyondellBasell in a press release. The company announced it is considering selling the facility or converting it to produce renewable fuels, which is a pattern being seen at refineries across the country.

Refinery closings have taken 3 million BBL/d from the global market since January 2020, including 1 million BBL/d in the U.S, according to the industry trade group American Fuel & Petrochemical Manufacturers.

Marathon Petroleum Corporation (NYSE: MPC) (Findlay, Ohio) closed its 161,000-BBL/d Martinez Refinery near San Francisco, California in April 2020 following COVID-induced weak demand for refined products, but last year announced it plans to convert the refinery to a renewable fuels facility.

It would initially be capable of processing 17,000 BBL/d, or 260 million gallons per year, of feedstocks such as animal fats, soybean oil and corn oil, into a renewable diesel. Following the completion of two additional phases by the end of 2023, Marathon expects the facility will be able to produce about 48,000 BBL/d, or 730 million gallons per year. Phase I is expected to begin in the second half of the year, with Phases 2 and 3 to follow. The project is a joint venture with Neste Corporation (Espoo, Finland). Subscribers can see the detailed project reports on Phase I and Phases 2 and 3.

Energy major Shell plc (NYSE:SHEL) (London, England) also closed a major refinery after it became unprofitable during COVID-19: its 240,000-BBL/d Convent Refinery in Louisiana. Shell has announced it is considering plans to convert the facility into a low-carbon, alternative fuels plant, in order to reduce the company's refining footprint. No timeline has been set for the project, but Shell Senior Vice President Rhoman Hardy has said the company no longer plans to sell the facility. Subscribers to the GMI Alternative Fuels Project Database can click here for the unconfirmed project report.

Hurricane Ida, which hit the Louisiana coast in late August of last year, also forced refiners to pivot. Following extensive storm damage, Phillips 66 (NYSE:PSX) (Houston, Texas) closed its 250,000-BBL/d Alliance Refinery in Belle Chase, Louisiana, 25 miles south of New Orleans. However, the refining, chemicals and midstream company has announced plans to convert it to a terminal facility.

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