Valero to buy LyondellBasell's shuttered Houston refinery

Overview

Updated 44 minutes ago

LyondellBasell shut its Houston refinery in February 2025 and left the refining business. On Friday, Valero agreed to buy the roughly 700-acre site next door for $320.5 million and restart 165,000 barrels a day of crude processing by the end of 2027.

The plant sits beside Valero's existing Houston refinery on the Houston Ship Channel, so the buyer can reuse docks, pipelines and storage rather than build them. Valero is paying what its chief executive calls a fraction of replacement cost, and it has left open a later investment in equipment for heavy sour crude.

Why it matters

A restart would return a large Gulf Coast refinery to service and show how cheaply an incumbent can absorb a rival's abandoned plant.

Questions about this story

Free account needed to ask — your question is kept and asked for you right after sign-up. Answers are public.

No questions yet — be the first to ask.

Key Indicators

$320.5M

Purchase price

Subject to closing adjustments.

165,000

Barrels per day Valero plans to restart

Light sweet crude capacity, targeted by the end of 2027.

263,776

Former refinery capacity in barrels per day

Capacity before LyondellBasell shut the plant in February 2025.

700

Site size in acres

Adjacent to Valero's existing Houston refinery on the Houston Ship Channel.

345

Layoffs LyondellBasell planned at closure

Reported as the refinery shut down in 2025.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Lane Riggs

Chairman, chief executive and president of Valero Energy

Leading the acquisition

Peter Vanacker

Chief executive of LyondellBasell

Selling a non-core asset

Organizations Involved

Valero Energy

Refining company

Buyer of the former Houston refinery site

San Antonio-based refiner with operations concentrated on the U.S. Gulf Coast, Midwest and West Coast.

LyondellBasell Industries N.V.

Chemicals and refining company

Seller of the former Houston refinery site

Chemicals company incorporated in the Netherlands with major operations in Houston and Rotterdam.

Valero Refining-Texas, L.P.

Valero subsidiary

Named buyer of the LYB Houston equity

Valero subsidiary that signed the agreement to acquire LYB Houston Hub Holdings.

Timeline

1918 October 2026

5 events Latest: Today

Tap a bar to jump to that date

October 2026
Valero agrees to buy former Houston refinery
Today Acquisition

Valero Refining-Texas to pay $320.5 million, with closing expected by year-end.
Today
LyondellBasell posts mixed third quarter
Today Earnings

Adjusted earnings of $2.54 a share miss estimates; revenue also falls short.
Today
February 2025
LyondellBasell shuts Houston refinery
Closure

The company exits refining and stops processing at the site.
February 2025
2025
Recycling conversion studied, then deferred
Strategy

LyondellBasell weighs an advanced recycling facility but puts off a final investment decision.
2025
1918
Houston refinery begins operating
History

The plant that became LyondellBasell's Houston refinery starts up.
1918

Scenarios

Deal closes by year-end 2026

Likely Resolves by End of 2026

Discussed by: Valero and LyondellBasell, which both said closing is expected in the fourth quarter

Both companies set closing for the fourth quarter, subject to the federal antitrust waiting period and other conditions. No competing bidder or financing obstacle has surfaced. If the review clears, Valero takes over site operations, environmental liabilities and pension obligations.

Valero restarts 165,000 barrels a day by end of 2027

Possible Resolves by End of 2027

Discussed by: Valero, in its acquisition announcement

Valero says it will initially restart light sweet crude processing at the site by the end of 2027. A restart depends on permits, the condition of the equipment and hiring. The company has not said how much the restart will cost.

Valero commits to heavy sour crude upgrade

Uncertain Resolves by End of 2028

Discussed by: Valero, which called it a later opportunity

Valero has said the site offers a chance to invest later in high-complexity equipment for heavy sour crude. No decision or budget has been announced. A commitment would need board approval and a multi-year construction schedule.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

2020

Shell sells Martinez refinery to PBF Energy (2020)

Shell sold its refinery in Martinez, California, to independent refiner PBF Energy as it pulled back from West Coast refining. The plant changed hands rather than closing outright, keeping the site in operation under a new owner.

Then

PBF took over the refinery and its workforce.

Now

The sale became part of a pattern in which major oil companies shed refining assets to independents.

Why this matters now

The Valero deal has the same shape: a major exits refining and an independent buys the plant next door.

2019

Philadelphia Energy Solutions refinery closes (2019)

A fire and explosion at the Philadelphia Energy Solutions refinery led the company to file for bankruptcy and shut the plant, the largest on the U.S. East Coast. No refiner stepped in to restart it.

Then

The site was sold for redevelopment rather than refining.

Now

It showed that a closed East Coast refinery could stay closed when no incumbent buyer wanted it.

Why this matters now

Valero is buying a shuttered plant, but unlike PES it sits beside an operating refinery, which is what makes a restart plausible.

2005

Valero buys Premcor (2005)

Valero acquired Premcor, adding refineries and turning itself into one of the largest U.S. refiners. The deal continued Valero's strategy of growing by buying existing plants rather than building new ones.

Then

Valero absorbed Premcor's refining capacity.

Now

Buying existing refineries became Valero's main route to scale.

Why this matters now

The Houston purchase follows the same playbook: buy an existing plant cheaply and fold it into the system.