LyondellBasell Industries NV has retained Bank of America Merrill Lynch to help with the potential sale of its 263,776 barrel-per-day refinery in Houston, according to two people familiar with the talks.
The move comes after the Dutch chemical company fielded inquiries from at least four possible suitors, the sources said. The process is expected to start in earnest after the U.S. Labor Day holiday in early September, one of the two sources said.
The Houston unit is a significant Gulf Coast refinery that can run a wide variety of crude oils, from light Bakken to heavier grades out of Canada. A sale could bring increased competition among Gulf Coast refiners as two of the potential bidders have no presence in the U.S. refinery row.
Valero Energy Corp (VLO.N), Saudi Aramco, Cenovus Energy Inc (CVE.TO) and Suncor Energy Inc (SU.TO) are among the companies that have expressed interest in the refinery, said the sources, who requested anonymity because they are not authorized to discuss the talks.
Canadian energy firms Suncor and Cenovus do not have any refineries in the Gulf Coast, and the Houston unit would give them a place to process heavier Canadian crudes they produce.
A LyondellBasell Industries spokeswoman said in an email Thursday: “We believe that in the longer term, the refinery may be more valuable as part of a larger refining system. We are exploring all options. However, no decisions have been made.” She declined to elaborate.
Lyondell has sent an email to employees that the refinery is for sale, according to sources who have seen the email.
Suncor and Valero declined to comment. Saudi Aramco and Cenovus did not immediately respond to requests for comment.
Representatives from Saudi Aramco were seen touring the facility earlier this year, two Gulf Coast sources told Reuters on Thursday.
Earlier this year, LyondellBasell Industries Chief Executive Bob Patel told attendees at an industry conference that he expected the refinery would eventually be put on the selling block, but did not offer any time frame.
“In the longer term, I can’t help but think it’s more valuable as part of a refining system than as part of a chemical company,” Patel said.
Lyondell management has consistently described the Houston refinery as a primary source of feedstocks for the company’s petrochemical plants, three of which are in industrial suburbs of Houston.
In 2005, Lyondell and minority partner Citgo Petroleum Corp [PDVSAC.UL] put the refinery up for sale to end a partnership that had unraveled after 12 years.
The bids for the plant reached between $5 billion and $6 billion before the sale was canceled and Lyondell bought out Citgo’s minority stake for $2.1 billion, or $19,000 per barrel of crude oil refining capacity.
Since that time, U.S. refinery values have fallen drastically with plants selling for less than $5,000 per barrel.
By Mike Stone and Jessica Resnick-Ault
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?