Valero to buy LyondellBasell's shuttered Houston refinery for $320.5 million

Valero Energy Corp. has agreed to pay $320.5 million for the shuttered LyondellBasell Houston refinery and plans to restart 165,000 b/d of light sweet crude processing by yearend 2027.

Valero Refining-Texas LP will acquire the idled full-conversion refinery (a configuration that converts residual oil into lighter products) from LyondellBasell Industries NV, the company disclosed in an Oct. 30 presentation. The deal is expected to close by yearend, subject to customary closing conditions.

What does the acquisition include?

The transaction covers more than the refining unit itself:

• About 700 acres on the Houston Ship Channel, adjacent to Valero's existing Houston refinery
• 13.5 million bbl of storage capacity
• Marine docks, rail-loading facilities and truck racks

The adjacency matters. Valero already operates a Houston refinery next door, and the acquired logistics infrastructure — docks, rail and truck racks — creates options to integrate refining and logistics operations across the combined site.

The purchase price works out to roughly $2,400 per barrel of the 165,000 b/d capacity Valero intends to restart, a fraction of replacement cost for Gulf Coast refining capacity. The figure reflects the plant's idled status after LyondellBasell halted operations in March 2025.

Why is Valero buying an idle plant?

The company framed the deal as a feedstock play rather than a capacity expansion. The acquisition will address intermediate feedstock shortages across Valero's US Gulf Coast refining system and reduce reliance on third-party purchases, the company said.

Specifically, Valero expects incremental FCC (fluid catalytic cracking, the unit that upgrades heavy gas oil into gasoline) and hydrocracker feed production from the restarted plant to cut external feedstock sourcing. Excess hydrotreating capacity at the site could upgrade intermediates produced at other Valero US Gulf Coast refineries.

In plain terms: the plant gives Valero an internal supply of blendstocks and feed streams for its wider Gulf Coast system.

What did management say about heavy crude?

Chairman, CEO and President Lane Riggs said the site could support future investment in heavy sour crude processing — a configuration that would process cheaper, higher-sulfur grades. The company did not provide financial details or a timetable for any heavy sour project, leaving that possibility firmly at the evaluation stage rather than sanctioned.

Riggs holds all three top posts at the San Antonio-based refiner.

Why did LyondellBasell sell?

LyondellBasell announced in April 2022 that it would cease operations at subsidiary Houston Refining LP's 268,000-b/d refinery as part of its exit from the crude oil refining business. Following repeated delays, the plant shut in March 2025 — three years after the original decision.

The company evaluated several options for the site, including a plan to convert the refinery into a hydrogen production facility. It ultimately determined that selling the asset "offered the most compelling opportunity" to advance the company's priorities, LyondellBasell said.

The sale closes LyondellBasell's exit from refining and hands Valero a rare piece of connected Gulf Coast industrial real estate with permits, storage and dockage already in place.

The watch items

Two dates drive this story. First, the transaction close, expected by yearend 2025. Second, the 165,000 b/d light sweet restart targeted for yearend 2027 — a tight but stated timeline for reactivating a plant idled since March 2025.

The heavy sour question remains open. Any FID on that configuration would require capital disclosure, engineering scope and likely permitting review, none of which Valero has yet provided.